lots of great feedback in this thread -- some in disagreement with others. I'm going to try and summarize what I read and perhaps you can all tell me where I get something wrong.

1) Pure graphic artists tend use more simple tools like Photoshop or GIMP to create a texture/pattern. However, much as in dress making, they would need a pattern outline to know the shape of the item and then they would only do stuff inside the shapes. These dress/item patterns would be a sort of template.

2) For these to become in game items a Turbine employee would need to use very different/more expensive tools to convert them into things the game engine can use. AND the process of applying the texture might stretch/distort things and require some tweaking.

3) The Dye process probably relies of a color swap of a particular color (like blue screen). It might be a particular shade of gray used.

4) In theory, if Turbine posted some templates, then Community Created textures/patterns could be created but then could never be implemented without Turbine being responsible for implementation.

5) Turbine ha never said they are interested in such activities nor have they agreed to use any such items in the game or issue any templates. Without templates it would be close to impossible for players to design anything.

6) If turbine were to have a competition and perhaps pick the top 5 designs there would be no real licensing issues since the publication process could go through their normal process of which Turbine has total control. But most believe that such a thing will never happen.

7) I assume these templates might look like typical dress making patterns. For example, a tunic might have separate sections in the template for front, back, sleeves, etc.

Ok, what did a I get wrong?