hello, I actually did the projection painting script a month ago or so, look at it here : http://blenderartists.org/forum/showthread.php?t=128867&highlight=projection+painting+script
I used the same idea as you
the script makes everything a little easier:
it makes an uvlayer and a new image. after painting, it bakes the new layer back into the original image.
The only problem is that you cannot really see the first layer if you don’t have a good glsl support.
I quite often use blenders texturing tools, and I’d really like if it would be looked at more in depth…
whoops sorry i missed your reply to this thread, anayo, i guess i should poke my head in here more often. I’ll see if I can locate the file. Nice texture on the dolphin btw.