Milkshape users help me!

I'm currently working on my first model ever. I used Milkshape 3D, I like the way the model turned out and I thought that I knew exactly how I was going to do the unwrapping and skinning. I was terribly wrong. I unwrapped the file with LithUnwrap 1.3, saved the .3ds and the .bmp and then converted them to .mdx and .blp files. I imported them into the WE just to make sure that everything had worked and it had. I was so excited!!! Then I started working on the skin. I started painting the .bmp in Photoshop and applied the materials to the different groups of my model using Milkshapes Texture Coordinate Editor. I wanted to look at the skin in the WE to see how it was progressing so I figured that I would need to follow the whole file converting process again. I opened the model in LithUnwrap again but was unable to save the model!?!?!?! o_O Is this due to the materials that I applied to the different groups? I'm not sure what I did wrong. I got this message:

The 3DS file format requires that all bitmap filenames be in the 8.3 filename format, otherwise they will be truncated: .\elitebloodelf.bmp
Verify your filenames and try again.

Please Help :( I've spent a lot of time on this model and I am so close to finishing it.

Here are a few pics of my progress for anyone that really cares, the Elite Blood Elf. All I've worked on is the head so far so the rest looks like crap for a reason. And keep in mind that this is my first model and first skin ever! So be nice. :D

Why are you using bmp file format? If I were you I would use targa (*.tga) right off the bat. Unless you are using paint instead of paintshop or photoshop. Otherwise you will have to resort to jepg (*.jpg) format because lithium does not like bitmaps. Instead of using lithium you can simply export the file in milkshape to *.3ds. Go to menu>export>Autodesk 3ds. You have it in 3ds right there.

Bitmaps are not good for anything. You need a better program to texture in. Paint won't do much for you. you can get the jasc paintshop pro. It has a free 30 day trial (and if you want to "extend" that trial period you can just set your comp clock back a few days and paintshop pro won't be the wiser.) Unless you have photoshop, which is by far one of the best texturing programs available. Also look into GIMP. It's a free program that is accually free and does a good enough job (but I have no experience with it).

Well, don't use LithUnwrap at all.

Check Oinkerwinkle's Tutorial and mine (which is in the broken Tutorials section at the moment).

Thx for tips guys. It really helped me out. :D