I’m a bit confused by the ways of texturing. Unwrapping, Projecting etc… Now I want to know when I have to use what.

UV mapping is for when you need lots of control over your texture. Think of your UV layout as a bearskin rug. When a hunter field dresses the bear, he needs to make cuts in the hide in a way that will allow him to remove the skin in a way that it will lay out flat. That is basically what you do when you UV unwrap. So, make seams where you would make the cuts on a hide ( It doesn’t have to be in one piece btw ) and then in edit mode press U and select ‘unwrap’. Now you may want to adjust your ‘hide’ a bit in the UV editor ( G S R grab scale and rotate just like in the 3D window ) . When you have it to your liking, you can add a new image to your UV coords ( coordinates ) and do some texture painting. You can texture paint in both the 3D and UV windows, depending. Then, once yuou have your basic texture painted, you can save the image, and take it into your favorite paint program to touch it up. It’s also a good way to paint normals maps for wrinkles and such.

Here is a decent explanation about UV Mapping: http://en.wikipedia.org/wiki/UV_mapping

Generally, you’ll be dealing with UV mapping almost all the time.

By “projection” I assume you are talking about camera mapping? Camera mapping is a trick that allows you to make a 2D image look 3D: http://www.youtube.com/watch?v=bYq33f752_s