Hello, there. I assume you want to know how to make some really simple lipstick. In this tutorial we're going to handpaint the lips and not use a picture. You'll need GIMP (I'm using the latest version, 2.6.11, if you have an earlier version some instructions might be a little different.)
Okay, let's start. (Just follow the yellow writing in alphabetical order.
Open up The Sims 2 Body Shop, it may take a while depending on how much custom content you have.
Once it's open, click Create Parts.



Now, click on Start New Project.



Choose Create Facial Hair, Makeup and Glasses.



Now, choose the makeup symbol (it looks like a paintbrush), choose the lipstick symbol, and pick any of the default lipsticks. (I'm using hot pink) Once you've picked a lipstick, at the bottom, click on the symbol of a file with an arrow pointing out.



Give your lipstick a name that'll make it easy to find, and then press the checkmark button.



Now we have to open up the file. You'll find it in: My Documents\EA Games\The Sims 2\Projects\[insertyourprojectnamehere]. Right click on the one that is called something like uuface-lip-brightpink.bmp and choose Edit with GIMP.



Now here's where the fun (or at least the editing) begins!
Now your image should look something like this:



If it looks black and white, you've opened the alpha, which is the shape of the lipstick. If it is tiny and has rainbow-ish scribbles, you've opened the swatch, which is the little thumbnail that shows when you click on it in the Body Shop and CAS.
Make a new layer. To do this, go to the toolbar, then choose Layers, then Add Layer.
Give your layer a name, make sure it set to Transparency. Make sure your new layer is selected, and go to the toolbox. Click on the Paintbrush tool and set a foreground color (the color you want your lipstick to be). Click on the big box in the middle of the toolbox and drag the line around until you get a color you like.
Color it all over the lips.



Reduce the layer opacity by going to Window...Recently Closed Docks...Layers, Undo...something like that.
Then select the lips layer, and at the top, use the slider to slide down the layer opacity to about 40ish percent.
Yes, it looks pretty unrealistic, but we are going to add some shine.
Use the dodge/burn tool (the last tool, looks like a black thermometer thing) and use the Circle (05) brush. Reduce the opacity to about 80 percent, and keep the brush scaled to about 1, and towards the bottom of the bottom lip, follow the original shine underneath.
On the top of the lip, on the top lip (sounds weird, I know), do the same thing, following the highlight of the lip.
Scale down the brush to around 0.80 percent, and underneath the original shine, add a little more so it looks like that...



It's looking a bit more realistic but not too much.
Now we're going to add even more shadows...
Reduce the opacity to about 73 percent, then pick the Circle (03) brush.
Now make even more lines, using the Dodge/Burn tool, in the middle, just above the line that divides the lip.



Switch to the Burn tool by pressing CTRL or finding Type in the toolbox, and choosing Burn. Burn makes it darker.
Turn up the opacity of the brush to 100 percent.
Draw across the line that divides the two lips. Be as careful as possible and try not to get any on the lips.



I kind of don't like how bright it is, so I'm reducing the opacity even more to about 29 percent...you can reduce yours to however much you think it needs. Try to make it not so bright that it hurts your eyes and looks unreal, but it shouldn't be so low that all you see is the Maxis lips underneath.



Back to the Dodge/Burn. Switch back to Dodge, and see those tiny little lines along the lips? Following the shape of them, draw on them lightly.



If you don't want any glitter on your lips, you're done with making the lips and you can scroll down to where we save it, preview it and import it into the game. If you do want glitter, than keep following along.
Go to Filters...Noise...HSV Noise (the first one)
Now adjust the Holdness, Hue, Saturation and Value sliders to your liking.
I wouldn't adjust the Hue slider too much. If you do, you get colorful sparkles on your lips. The Saturation slider is one I wouldn't use too much, either. If you do, you get blindingly bright sparkles.
You can look in the little preview box above the sliders to see how it's going to look. You may need to scroll over a little bit to get the lips in view.



Once you're happy with what you've created, go to File, all the way at the top left, then choose Save. This will replace what was previously there, so you don't need to do Save As.



Now...the moment of truth...(not really but you're gonna see what it looks like)
You get this message that BMP images can't handle layers. Choose Merge Visable Layers. This does nothing to your original image, so don't worry.



Now, open the window with Body Shop. Your screen should look something like this....



Now at the bottom left, click the Refresh Preview Sim button.
This will show your new lipstick on the Preview Sim over the old one.
Here's my result:



If yours looks plain, don't worry. Use it in game and it'll look MUCH better, trust me.
If you want to share your creation, you want to edit the swatch. In the project's folder, find the image that is simply swatch.bmp (the rainbowish scribbles) This is the the thumbnail that shows up in the Body Shop and CAS, once you click on it your item shows on the Sim. This usually has the item itself on it, so people know what it is. Refresh it like you did the actual lipstick.

Now, in the typing space at the bottom where it says "Enter Tool Tip Here", you can write in your username so people know who made it, what shade it is, or anything. This is the text, that once you hover over the swatch appears. I simply put my username. Once you entered a tool tip (not nessecary to import the item, btw, you can leave it blank if you want) click on the arrow pointing to a file folder at the bottom. This imports your creation to the game, and you can find it in the Body Shop and CAS.

Enjoy your new creation! Hope this helps.

Very informative!