(Sigh)... There should be a sticky about this.
I Once also had this problem, here are the right steps to do it:
1.Save your model in Milkshape and goto File/New
2.Open up lithunwrap
3.Goto File/Model/Open and open your Milkshape Model up
4.Goto Select/Group then Goto Select/All
5.Now goto Tools/Uv Mapping and choose whatever kind of UV map
6.Now goto File/Uv Map/Save and save as a .bmp, 512 by 512
7.Next Goto File/Model/Save and save the model over the current one
8.Open your new model in milkshape
9.Right click in the 3D view and make sure 'Textured' is checked
10.Goto Materials and click new
11.Click the first 'none' button and pick the UV map BMP file
12.Select all the groups and click 'Assign'
13.Wa La! You can put the textures over the wires in the BMP file
"Forgiveness is a good thing"
"Forgiveness is between them, and God. I set up the meeting"
-Man on Fire