Lithunwrap is very capable, like I'd use it over 3DS Max's cumbersome system anyday.
What you should do is load your .3DS (recommended wip format) into Lith and then select all the polygons and decal map them from the side (if it's a gun). The you can map a photo really easily, but also you should take the barrel (I suggest leaving it as a seperate limb for easy selection) and cylinder map it - this will roll out the barrel and make a bit for the end, real easy to texture then.
One major hurdle for people is the stretching over the top - now a cylinder mapped barrel will not have the problem, but decal mapping from the side is no good for polygons that are not facing the sides. For the top parts, I tend to break them off first then decal map from the correct orientation (top). To break of a side, select all the polygons along the top of the gun, this will select polys that are already UV'd fine - so you deselect to polys that are not on the top of the gun - your looking for a thin red line. With this technique you can break off the sides that are wrongly UV'd and decal map them from the front or top.
UV mapping can take a while to get the hang off, it's a whole other skill besides modelling and coding and drawing the textures themselves - practice is really the only way to get your head around it.
Van-B
