Find the File
The first thing you need to do is find the skin file you are looking for. Usually these can be found according to a common name that you suspect they would be called. For example- grenade_american_mp is the american grenade skin. These files occur under the later iw_# iwd files under the directory images.
Convert it to a Editable Format
Next you need to make it editable, as obviously .iwi is not editable. To do this you need to download a converter which can be found HERE. To use it simply put it in the same folder as the iwi file, and drag the iwi file on top of it, a .dds file should be produced in the same folder a few seconds later.
Now the file is in a .dds format. But unfortunately this is still incompatible with photoshop, so download this handy .dds plugin HERE and install it.
Edit With Photoshop
Next you need to actually edit the picture. First open it with photoshop, when it asks if you want to display mipmaps, select yes. In all my previous experiences in skinning, mipmaps will be displayed by a black portion of the picture, if this is the case, do not edit it. Now simply edit the skin to how you like. Now go to file, and save as. Select to save it as a .dds file. When saving you want to keep your current mipmaps, so all settings should be in place there. Look at the upper left area. Select DXT5 for the mipmap type, then save it. (it will take a little while)
Back to .IWI
Now you must use one last converter to get your file back into .iwi format. This converter can be found HERE. Very good. If it does not work when attempting to reconvert, then you must presume you did something wrong in either the opening or the saving process of the file. Now you need to pack it back into an iwd file. To do this follow the next instructions.
Pack Into An IWD File
Copy and paste an existing .iwd file into the folder with your skin (the smaller the file the better). Using winRAR (or some other utility if it works) go into the file and delete everything but one folder. Now create a folder called images. Now put your skin files inside the folder you made and delete the other folder. The only reason we did not delete this folder before we put the skin is because it would have made the file delete itself due to lack of content. Now simply rename it whatever you want and put it in your main folder
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