A lot of people have asked how I can do my textures fast and (usually) so well. I've asked myself that question and I still can't really come up with a solid answer. However, in this tutorial I'm going to show you how to create a nice texture for Halflife that you can use as a base and create more textures from. So sit back, grab a drink and enjoy!
What we'll need: Wally 1.29G, ApocX1.pal
What helps: Photoshop, Paint Shop Pro, Eye Candy and a whole lot of patience
Try not to be too concerned about the 'What helps' title up there. That's only for touching up your texture later on. This tutorial is 100% Wally.

Step 1
Fire up wally and start a brand new Halflife texture. You should have a mental image of the texture you want to create. This will help you determine which palette to use. I'd recommend either the Quake1, Quake2 or ApocX1 (available at TextureCentral).
Once you've selected a palette you should select a texture size. We're going to make a wall so we'll use 128x128.

Step 2
We'll make this a panelled / rust metal texture.
*Set the spray tool to medium*
The first thing you want to do is fill the entire texture (currently black) with a base color. Lets go ahead and fill it with a dark gray from the ApocX1.pal. Then choose 'Add Noise' from the image menu. Medium should do nicely. Make sure to check 'monochrome'
Next we pick a dark red and use the spray paint tool. Set it to 32 Square and start spraying along the bottom of the image (try different height variations as we're going for a stained look).

After you've done this go back over the stain with a rusty brown color from the palette (medium brown). Repeat these steps with different colors that you'd see in rust (dark orange, dark red, orange, red etc...) When spraying with the lighter colors choose a smaller brush. The lighter colors will act as a high light.

Use a dark skin color to add to the grey background. I've also added a brighter orange to the rust patch at the bottom.

Step 3
Select the scratch tool and set it to 'more' for it's depth. With the scratch tool still selected choose the 'line' method of drawing. Draw a line right across the top half of the texture. Leave about 12-14 pixels above the scratch.
Next choose the darken tool. Choose 'Hollow rectangle' as your drawing style. Drag a darkened rectangle over your texture until each edge of your texture is darkened. Now choose the lighten tool and draw the hollowed rectangle right next to the darkened one (like a scratch effect.) Don't forget to make it consistent with the scratch.

The next part is really fun! To give the texture more of a 'metallic' look let's add some rivets. Rivets have two methods of drawing. You can have them aligned to a grid (one will appear every 8,16 or 32 pixels) with the left click. The right click will place a rive under the pointer regardless of what pixel gap you set the rivets to. Depending on your texture you'll have to choose either left or right. If you're using the right click method it's best to do it in tiled mode. Remember pixel distances that the first rivet was (ie: one pixel lower than the white border and one pixel to the right of the white border). Let's just add four rivets for this texture, one on each corner.

Step 4 (finishing up)
Almost done! Select 'Add Noise' from the images menu. Once again choose medium. Now choose 'Blend' from the images menu and choose...light (thought I'd say medium right? =). Now just remip your texture and you're done.

Touching up your texture
This is where photoshop / PSP comes in handy. In wally you can just press CTRL+C to copy your texture and then press CTRL+V to paste it into your graphic app. From here you can add stains, blur it more, sharpen it and add shadows. DO whatever you want to it!

Variations
What you'll want to do is use this texture as a base. from there you can do things like: Add a tinted bar through the texture (always looks cool for some reason...) add cracks / scorched marks and bullet holes. A good idea is to beef up the header of the image (the grey above the scratch). You can add a series of lights to the header or even make it into a grate. Another idea is to 'carve' out the middle of the texture (leaving the middle black) and add a computer console.

FAQ
Q: Why all the noise in your textures?
A: When was the last time you saw a perfect wall? The noise gives the impression of imperfections and an overall grain to the texture. IMO it makes it much more realistic. I've seen flat, one color textures attempt before. They look really ugly in Quake2 / Halflife.
Q: Why does Wally do...
A: Don't ask me any technical questions about Wally. I'm just a user. If you have questions about Wally you can get in touch with the creators on the Wally forum.
Q: I added lights to the header but it isn't lit in the game!
A: Halflife uses a file called "lights.rad" which stores all the light values (and color) for the textures. If you want your texture to emit light you're going to have to add it manually to the lights.rad file. Only problem is that your entire texture will glow as oppsosed to just the header lights.