No idea how you create them, but I can tell you how to use them...
1). After downloading the mod, ALWAYS read the 'read me' file - this often tells you important things (like how to install it!)
2). You need a special program that replaces the original file with the mod. They way this works is there is a large file with a .DRS extension. This contains (for example), all the graphics. It's a way of having one big file rather than 1000's of little files everywhere. The program is called SLP Studio and can be found in the Utilities section here.
3). Before you replace a graphic with a mod - make sure you copy the original first - in case you don't like the mod or something goes wrong.
4). DO the replace and away you go.
Do watch out with SLP Studio - it can take awhile to carry out the swap. Look on the main screen and you will see "working...". Once that goes away - the mod is ready to use.
Hope this helps!------------------
Gothmog
Making IT magic!