I believe your main problem boofus is the age of the skin you are trying to update. I myself have tried importing an older XP skin using SkinStudio 8 (SKS8), but it gets totally screwed up in many areas because SKS8 has had the parts for Windows XP and Windows Vista removed from it, it is for Window 7, 8 and 8.1. I believe if you can install SkinStudio 7 (SKS7) and import the skin into it, you will have much better results. Then after you bring the skin up to Windows 7 standards in SKS7, you can install SKS8 and work on the skin even more, even bring it up to Windows 8 if you want.
If you need SkinStudio 7, please PM me with your email address and I will send it to you.