Painting? or desiging?

For building your own models, the free program is gmax, included in the extras folder of disc 4 (or 1) of the FS2004 CDs.

Alternatively, you can download it from turbosquid.com

http://wwww.turbosquid.com/gmax

For which Sim version? CFS1/FS98 can be done by opening their individual texture files with MSpaint. If you have a capable scanner, you can xfer what you've hand drawn into bitmap and apply it to the texture file. It's best to replicate & rename the original texture file. Also make a habit of making the upper left pixel 'true' black so that you don't wind up flying blind should you ever do similar work with a panel texture.

I use pixia which is good for repainting.  It's available here  Scroll down a bit, and it's the English Version installer you need to d/l.

As Tom_M said, you will need DXTBmp to convert the files otherwise you can't work with them.  That is available here