Minecraft skin info guide
Minecraft Steve default skin (resize to 64 pixels x 64 and convert to png)
Making a custom Minecraft skin
In order to make and use a Minecraft skin players should generally use the default .png file which can be acquired from the profile page of the official Minecraft website. The images to the right are the ones that can be acquired from the profile page of Minecraft. Feel free to download them and start working on them right away in a paint program.
Be careful working with these PNG's, it's not quite how some people envision, but this is how simple 3D model skins are done.
Minecraft Alex default skin (resize to 64 pixels x 64 and convert to png)
The new default Minecraft skin: Alex
More recently Minecraft / Mojang added a second default skin named "alex." This character looks Irish/swedish/northern european and is just another starting point for the same thing.
Alex tends to take a green shirt type of style on life. His light and dark brown pants are the envy of all his future block-world neighbors. Minecraft game life just wouldn't be the same without random Steve's and Alex's running around changing the world as we know it.
How to customize Minecraft skins
The correct way to work with the images above is to resize them to 64x64 pixels in any paint-like program. Then from there hold down left CTRL and them zoom with the mouse wheel until these pictures are a bunch of pixels. From this point people can take their time and edit each piece of the Minecraft character pixel by pixel, there are only a few to actually work with when the Minecraft skin picture guide is the correct size.
If pictures are not 64x64 and .png then the profile page will reject it. There's also a limit of 6.4KB in size, but generally that won't be a problem as long as the above images are resized to 64x64 pixels and converted to PNG files.
Uploading custom Minecraft skins
In order to upload a custom Minecraft skin and actually apply it to the character, go to the profile page at Minecraft.net/profile and log in. Once logged in there will only be a few options; there's a browse for files button, upload button, and reset button, along with some other features too.
When uploading files be sure to double check and make sure that they are 64 pixels by 64 pixels, in PNG file format, and less than 6.4KB in size.
Which did you pick by default?
Downloading custom Minecraft skins
There are plenty of website out there on the internet where people can download hundreds or thousands of skins made by people like you and me. Go figure there's a website called MinecraftSkins.com where people can thumbs up and down hundreds of Minecraft skins that people have made.
Another site that competes with this site is Minecraftskins.net instead. Both of these online Minecraft sites offer plenty of free Minecraft skins for the people who don't feel like hand crafting their own skin.
Changing the skins of other Minecraft world objects
Ever want to change how a creeper looks? Make zombies into angels? Pigs into dogs? It's possible to do in Minecraft too, but dramatically more complicated then changing the skin of the default player character.
There's a Minecraft forum post where someone explains roughly how to change a creeper skin, and from there the rest of the objects should be easy to work with too. Not sure exactly how it works but if that's the goal to pursue, there's the guide to start with.
It's amazing how in Minecraft players can actually choose how they want to play the game by re-imaging the game itself. With a little bit of time and work people can recreate the Minecraft world any which way they want.