ok... Its nothing i can explain instantly here.. im thinking of making a tutorial.. but that wont be ready just yet..
Main programs i use are
3d studio, photoshop 7.0 and you need your standard text editing program (word, notepad, wordpad) to make your SAB and SKIN files. then you need pop'n'fresh's MD3 exporter for 3dstudio also.. as well as MD3view to convert the MD3 to GLM.
if you cant get/afford 3d studio .. then go for the free alternative. GMAX
if you cant afford photoshop.. i think most art programs should work.. but i dont know how to use them to make skins work properly.