The term you are looking for is called UV mapping or UV wrapping.
Think of a cereal box without the contents.
carefully tear it apart keeping it all in one piece from the glued points.
lay this out flat and check out where the graphics are laid out.
This in principle is the same aspect to what you have to do to your model.
Blender has many tutes on the net regarding this feature.
There are two ways to achieve this.
raw uv mapping or with predefined seams.
here is a basic tute to get you started.
http://www.biorust.com/index.php?page=tutorial_detail&tutid=85
Uv mapping can appear to be a black art reserved for the insane but if you stick with it, it will make a lot more sense.
once you have dabbled in that ture go here.
http://en.wikibooks.org/wiki/Blender_3D:_Noob_to_Pro/UV_Mapping
As for your model posted, it appears to have some issues with smoothing groups and is probably way to many polys for a game.