You can't always edit the alpha file. If you black out the alpha file and the mesh isn't flush with the skin, then the skin texture jumps out onto the clothes or hair. Some of the newer Maxis Body Shop items are alpha-editable, a small number of custom creations are, but if you play with the alpha and get skin color where the clothing color used to be, the only way to get what you want will be to learn how to mesh.

The grey stuff is your bump map. Lots of good information in the Wiki here on bump maps. Not every item has one, but if you're changing a texture, you're probably going to have to do some work on the bump map, too.

To all paint.net users for some reason you can't edit alphas on it but you can use artweaver (it's free) which is great for blending textures and stuff although not being so user friendly.

How do I make the boots go up on the trousers?
Do I have to change the mesh?

Yes, you have to change the mesh. Without changing the mesh, all you can do is put boot texture on the pants.

Uh... I hate to be a drag, but is there anyway you could get the pictures workign again? Being a teacher, you probably know about learning methods. I for one am a visual learner, and I'm finding all your tutorials difficult without the pictures.