Hey Stickboy,
You can use Windows Paint, but it's a very basic program

It would be better to go for a program like Paint Shop Pro or Photoshop, both are commercial programs though. Another alternative would be a freeware program called Pixia

You will also need a program called DXTBmp, which will allow you to convert your textures into a recognised FS format.
Pixia:
http://park18.wakwak.com/~pixia/DXTBmp:
http://www.mnwright.btinternet.co.uk/Regards,
Stratobat