Okay, here goes!  First of all, as there are a lot of .BMP files  involved in making a skin, its best to make a new folder for them.

When you run Skin Creator for the first time, it will need to be told which image editor to use. Click on "Tools - Select External Editors"
Once in your PSP folder, click to highlight PSP, then click "Open"
You'll then see the screen below.  Click on "Browse" and navigate to where your version of PSP is.
Then click OK.   Skin Creator will now automatically open PSP when needed.
Another thing worth doing, because I've accidentally saved the wrong thing in the right place (and vice versa) before now, is to save the unchanged file right away.  Select "File - Save As", and choose a folder for it.  When you click "Save" you will see this dialogue box:-

(Where "Newskin" is the name you've given your skin file)
Preliminary tasks.
Display name is the title you want people to see when they go to choose a new skin from within Incredimail, Filename is.. well, the name of the file, and the collection name is anything you want.  It defaults to "General", but you can just type over it.

Click "OK" and its saved.
More to come.....