Instructions
Access your Forza 2 profile from the main menu and go to the "Garage." Open "My Cars," which is the first option.
Select a car from the menu and hit the "A" button. Choose either "Decals" or "Paint." A tutorial on using the Decals and Paint tools will automatically start and instruct you on how to use the tools.
Finish the tutorial and begin creating your own unique design for your car.