There's some decent vid tuts on youtube.
http://www.youtube.com/watch?v=F4EooYoYYTQ
http://www.youtube.com/watch?v=lnekNH3gS1c
Each layer is like a picture in itself. If the face is the background, you can create a new layer "above" that one. If you make it all one color, and the opacity 100%, then all you see is that color. But, if you reduce the opacity, it becomes like a "screen" over the original picture, giving it some tint.
That's if you make the layer all one color.
If you start with the layer blank, or pure alpha, even at 100% opacity it will be invisible, then you can draw on the layer. For the face, if the regular arms are in the background, you can paint green stripes on the layer above the arms. That will look very artificial, though. You can then lower the opacity, so things like the hair can still be seen "under" the green. You can then add another layer of brown stripes "above" that, and lower the opacity until you have green and brown strips visible over the arms.
The main thing to remember is that when you have it in a way you like it, you have to "merge" the layers into one image, and save that as the jpg/png/tif (can't remember what the format has to be) for use in ArmA. It can take some testing to get the layer balance just right.
There are also some effects/tricks you can use on the layers, such as the paintbrush mode that darkens the edges of the areas you paint. That can be a neat effect for paint, or some cracking-type texture to make the camo look dried up. You could even use this technique to do tattoos.

Sic Semper tyrannosauro.