just posting this to bump this up a bit.
1 Download and install a CURRENT copy of Blender (2.6.2|3 works)
A copy the contents of the \tools\blender26x to your blender addons folder (note you should get a warning about the MHX importer plugin keep the newer version)
B whenever you deal with clothing or targets use the base.obj from the data\3dobjs folder as your reference
2 Gimp works well if you don't have a picture editor
3 Please use the Nightly since the current "release" version is very outdated