Skinning is when you change the look of an application by applying different icons for buttons or the color of bars or gradients to the menus. That kind of thing. Like in Windows XP, you can change the color scheme and the style of the windows and buttons to make it look like XP with the rounded edges or like Win2k with the more blocky look. Basically so the user can tweak it to look different.
If you decide to implement something like this, it should be put way down at the bottom of the list of things to do since it’s just eye candy. Any usability and functionality enhancements should be given top priority.