If you have models with new banners done, you assign the modelparts to materials you wish (this determines which texture the game will read for them), assign them to bones, remeber comments for each group, and uv-map them to the texture-sheet. If you want new skins to the model, like different flag, you edit the texture, and normal-map (all textures have two files) too. If you use same named files that are already ingame, you don't need to do anything else. Edited model -> assign new parts to materials -> remember comments -> uvmap them -> rig to bones -> Edit textures if needed -> done.
EDIT: And if other units use same textures, you might want to make them use different/newly named textures if you want to change them a bit more, or if you want to have more space for your new models in the texturesheet. You need to change the texture path with the particular unit in this case in the text files.
Not sure if that answered the question, and I'm not very good explaining things, but here you can pretty much find anything you need to mod M2. I highly recommend checking the Alletum's tome of knowledge pdf-file, great resource for making/editing/adding new units

:
http://www.twcenter.net/forums/forumdisplay.php?f=272