Hi!
I wrote a previous reply to this thread but somehow ended up deleting it < put huge facepalm here>!
Here's the short version:
Paint.NET or Gimp for your templates - since they're both freeware and can handle layers; Paint.NET has a much smoother learning curve but it is not so powerful as Gimp.
Then maybe something like DXTBmp for converting the BMPs resulting from your merged layers into a format suitable for FS9.
A good way to start is with paint kits as they'll do a lot of the hard work for you...
In "my" days as a repainter with Milton Shupe Team I released a few of those paint kits; I'm sure the Howard 500 has it and probably the Dash7 (yes, the Dash7 for sure, too). Andre Folkers who followed me in MST also released a few paint kits. The thing with these paint kits is that you get the fuse lines and rivets in separate top level layers, so you may add your paint scheme underneath. In the case of the Howard 500 I also added a bare metal texture to it.
Also, about photorealistic repaints: they're quite hard to do, as mentioned above, but can be done, specially if you have access to the plane and can take the photos yourself. This was the case, again, with the Howard 500, where Milton went to the airport and sent me hundreds of great photos and details. Still the final repaint ended up being a mix of photos and hand painted textures.
Another thing about repaints: these are highly dependent of the model mapping done by the model developer. That's the process of assigning a given texture name/are to a a given area on the plane. A bad mapping will greatly compromise the repaint, for instance, when a same texture is assigned to both left and right sides of the plane for memory saving... in a case like that you can't add letters or numbers to that section/texture.
One thing I always did was to start preparing my repaint templates, adding several good/previous repaints done for that aircraft, each to its own layer. That will work greatly to help identify sections in the plane.
Then get ready to load your work into FS hundreds (sometimes more) of times! To check results and progress 
I used to assign a key combination to FS so I could reload the aircraft ina pre saved situation file, without having to close the flight and load it again.
As with everything in FS it's a labor of love. And tough work..!
