Check out the Readme.txt file, it describes the whole process start to finish. Just copy over a paintjob from your livery folder, then launch the unpacking tool and hit unpack to convert them to DDS files, which can be opened in Photoshop or Paint Shop Pro given the right plugin, which can be downloaded at nVidia's website. When you're done editing them, save them as DXT5 dds files, run the texture tool again, hit pack, and copy the texture files and pkg back to the xbox.