Hi,
Thanks to all for your responses. It turns out that the problem was not a question of which software to use. The G3 templates are in imtl format and have to be converted into jpg format in order to edit them with photoshop, gimp, paint, etc.
Star by choosing a G3 clone cloth avatar. Select "upper", "lower", or "shoes". Next, in the "material and texture settings" section of the "modify menu" where it lists the selected material there is an eyedropper just to the right (called"pick") use this to select the template, upper or lower, on your avatar. It won't highlight or anything you just need faith. Next, somewhat further down the page,to the right of the "uv ref." button you have "open, delete, and a "save as" icons. click on the "save as" icon and save the template as a jpg file, somewhere where you can find it easily later. This jpg file is the one your going to modify in photoshop etc.
I hope this is a clear description. When I figure out how to set up gimp as the default template modifier in iClones preferences, I'll get back to you.
sas