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This has always bothered me, and I've never found a suitable answer other than 'just change the colours of an origonal one, but keep in the lines!'

I'd like to think I have the skills to draw my own, but how do you decide on the layout? Do you need the model first? Also do I have to rely on artist muscle when it comes to creating the image in it's 'unfolded' state?

Let me know

Effectively when developing a skin the 3d artist usually has to unwrap it to give the texture artist the best possible space for areas. Making skins that have the right amount of space and scale is an artform in itself - but basically there are a few golden rules to follow when unwrapping prior to skinning.

1) detailed areas should be given priority - this means try to keep then relatively larger than the rest
2) areas that need to blend suchas arms should all be either a single area or placed close enough to setup the blend
3) try to keep the main shape ... the more of the model you can keep in tact the better and easier it will be to dipict the areas and texture seemlessly

once you have done all of that its upto your artistic skills in your prefered package. I'm sure someone here will be happy to teach you techniques, probably best not from me

UVMapper will unwrap the model for you, even if it isn't textured. http://www.uvmapper.com/ However you still need to be able to draw the skin.

Models for games requires good texturing.

To texture a model, you'll have to unwrap the model first(UVMapper or Lithunwrap), tug on the vertices so everything lines up nicely, before texturing it, or else you'll have one HARD TIME getting your model's texture right.

If you're trying to simulate muscles bulges when any limb are contracted, then I really cant help. Sorry.