I'm confused about what these channels are for.

I'd like to be able to apply .jpg artwork as a texture to an area of a shirt.  So I've attempted to do this using one of the Fabric Diffuse Channels.

In this example I've Selected "Fabric 2 (Green)" and I've applied the jpg pictured center.  However this is not showing up on the corresponding area of the shirt.



I don't see really anything about this in the Learning Resources.  Can anybody explain this to me?  

Thanks!