The game searches for custom hand-skins in the /wastes/skins/ directory.
If the `skins/` directories don't exist, create it!

Inside of that folder structure, you can start adding in a few custom skins for the hands.
For each skin, create a folder with a unique name.

You can download an example skin folder, which is basically just the default hand-skin, here:
http://icculus.org/~marco/files/handskin_example.zip

That has all the files that you really need.

The info.txt contains the title/author as well as version number for your skin.
The syntax for those info.txt files is pretty straightforward:

Title=Example Name
Author=John Doe
Version=1.0

If you don't provide this info, the game will fill that in - however you NEED an info.txt file.
The preview image should be an image that's 128x192 px in size and called preview.tga.

The handskin itself needs to be called skin.tga and have a size of 256x512 px.

Targa files should (but don't have to be) 24-bit TGA files. Photoshop/PaintDotNET/GIMP will easily export them.

Happy skin-making!