I re-downloaded the game (the old one got deleted) and extracted it to slave hard drive E:
I ran the game, authorised it and it runs fine but the skin jpeg files are missing from skins folder and hence I can't edit them.
Any ideas as to why they haven't extracted?

try extracting them again maybe?

The new LFS-X version only comes with .dds skins.

If you want the jpg skins download the skins cmx viewer....or get some to send you them.

http://www.lfs.net/?page=addons