I have not attempted this yet but I will involve my two boys who have expressed interest in creating a texture pack. Just wanted to say thank you for the tutorial.
I have and will refer inspiring texture pack makers to this tutorial.
i get weird... distortion i think? When i save and exit, all the textures that i made and the textures that were already there get weird 1-pixel blobs of pink, white, blue, green, orange.. IT'S A MESS! i thought it was a transparency threshold problem, maybe it is, but i set mine to 10 after having the problem with max transparency threshold.