Dear Kent,
I'm using Blend v2.74, and I couldn't using stencil brush :( I only used your sources, didn't touched anything(I needed to make a paint slot with diffuse color because I had missing data error), the thumnails shows up fine, but the transparent image you have in the movie doesn't show up for me. The other brush mappings except stencil work just fine.
Texturing is always the hardest part on blender for me... Could you let me know what the problem might be? thanks