Hi again,
If I assign the UV's to the paint image, then go into texture paint mode, the menu at the bottom switches to another image (so does the one in the actual UV/image editor window) and the model appears white. I can't paint on it.
In edit mode:
in texture paint mode:
Ok cool - this is the texture slots thing. Since this pancake hobo course was recorded, they changed the way to paint using Blender Render. Check out the beginning of this video, starting at 3:30, to see how to set it up.