Instructions
Open the editor from the Forza 3 main menu, and choose "Paint," then "Paint Car." It's not a complex program, sort of an advanced version of Windows' Paint. The trick is to learn to control it using the Xbox controller instead of a mouse. Browse the sub-menus to find available shapes and colors; all of the details you'll be putting on your car have to be made up of these basic polygons, arranged in layers and colored to form the image you have in mind.
Choose a car to use as a canvas. The designs you create can be transferred between cars, so designing on a simpler car makes for an easier start. Choose a base color. Press the "A" button to select a color, and watch as the base of the car changes.
Exit the "Paint Car" area, and select "Apply decals" from the paint menu. This doesn't mean you're attaching stickers to the car. Additional colors are added as layers, and you have to form the shapes for the details you want to paint before you can paint them. Press the right and left triggers to rotate through car sections. Choose the right panel, as an example. Select "New layer" and press "A." Then scroll through the available decals as a base shape for a layer of paint. Select a color. Press the triggers to switch between the basic options (move, size and spin), and use the analog stick to adjust the values. As you pull the shape around, notice how sensitive the controls are. It may take some practice to get used to modifying layers.
Hit the "B" button to go back to the layer menu. Rotate the car using R and L to select a new section, and then add another decal and color it. You can also select individual components, like mirrors and bumpers, and color them by added a decal to cover the entire shape.
Hit "B" repeatedly to go up through menu levels. Before you exit to the main screen, you will be prompted to save your project. Give it a name you can remember. Open another car, and load your project by pressing "Start" and then "A" while in a blank layer to apply your paint job to another car. You can stretch and rotate your saved design to fit a different model.