You will need
Install everything: Gimp DDS plugin goes in the gimp plugins directory (ex: C:\Program Files (x86)\GIMP-2.0\lib\gimp\2.0\plug-ins)
Fallout Mod Manager
Run FOMM and select Tools>BSA unpacker
Select Open and navigate to Skyrim's meshes.bsa, which can be found, for example, here: C:\Program Files (x86)\Steam\steamapps\common\skyrim\Data.
Expand Skyrim - Meshes, then meshes, then weapons, then select silver. You should now see this:
Now, select both silversword.nif and 1stpersonsilversword.nif From what I have observed, silversword.nif is the object that is displayed when you see the sword laying around in the world. 1stpersonsilversword.nif is the model that you see when you have the item selected in your inventory, and when you have it equipped and out.
Anyway, extract them both to (Skyrim directory)/Data/Meshes/Weapons/Silver.
Now go back to BSA Unpacker and hit close.
Now hit open, and open Textures.bsa (you shouldn't have to navigate anywhere, you should already be in the right folder)
Expand Skyrim - Textures, then textures, then weapons, then select silver. You should now see this:
Now, select silversword.dds and extract it to (Skyrim directory)/Data/Textures/Weapons/Silver
At this point, we have all the files that we need to work with. You should change silversword in the dds file and the nif files to something else. I named mine paladinsword.
Now, we need to open up the .dds file with Gimp. This should be as simple as firing up gimp, selecting open and opening up silversword.dds. Uncheck Load mipmaps so that you load only the main texture layer. Edit the image to your heart's content, then simply save it, by clicking File>Save As. A saving dialogue box will open, where it says Compression select BC1/DXT1 then check the flag next to Generate Mipmaps then click save.
At this point, it's just a matter of using nifskope to change the texture.
Hit Load which is just below File.
Load one of our nif files.
Expand 0 BSFadeNode, then 26 NiTriShape, then 28 BSLightingShaderProperty and finally select 29 BSShaderTextureSet.
Now, look at the bottom window, and expand Textures and right click the very top file path, and select Texture>Choose.
Choose the dds file that we modified.
At this point, you should see a sword with our modified texture (see my example above)
Now, select Save As, which is to the right of Load, and save your work Remember, you should have changed the "silversword" part of all the files we have been working with, and you should have saved your work to the file paths I mentioned above. If you are working in a folder on your desktop, for example, the Creation Kit will complain (IIRC) during this next part.
Anyway, repeat all these steps for the other nif file, using the same texture and all.
The last thing to do is integrate it into Skyrim via the CK. Fire it up, and navigate to WorldObjects>Static>Weapons>Silver.
Right click 1stPersonSilverSword and duplicate it. Rename your duplicated file to whatever name you went with when you replaced "silversword" (Ex: 1stPersonPaladinSword for me) Do not create a new form, when it asks you if you want to. (There are many ways to create a new form, if you want to do this differently, go ahead)
Double click it, and edit the model to be your 1stPerson<stuff here>Sword.nif. You should see the model that we saw in NifSkope, new textures and all at this point when you preview it.
Now, go to Items>Weapon>WEAPONS>Silver and duplicate SilverSword.
Rename it, then double click it.
Change the name of the item to whatever you are naming this (Ex: Paladin Sword)
Click Art & Sound, which is underneath Template.
Finally, change the model to your non-first person model, then select your first person model for 1st Person Model Object
Save changes to your plugin, make sure Skyrim loads it (by clicking Data Files on the Skyrim splash screen.
Test your hard work by hitting '`' from the Skyrim main menu (to display the console) and type coc molagbalvoicecell (a really small area that loads fast). Then, enter help "<your item name here>" For me, help "paladin sword". This will display a line similar to this WEAP: (05000d62) 'Paladin Sword' We need that number. You don't need to enter leading zeros, so next enter player.additem 5000d62 1, replacing my number with your number, and you should now have your retextured item in your inventory!