So I get how to pull textures out. I also get how to put them into minecraft.jar; However what
I don't get is how to make a custom texture pack to select from the
list. What do I have to do in order to get it on that list?

Bonus points if you can answer any of these texture questions:

1- Where is the grass texture? Is it one of the grey squares since
they can be different colored? And if so are the colors decided by the
foliagecolor and grasscolor? (And is foliage trees?)

2- What are those things under the particle image?

3- Why are there five versions of water and lava under terrain?

4- Under the terrain image what is the blue square and what is the "FIRE TEX!" square?

5- What is Vignette for?

6- What is the water image for under the misc folder?

7- The GUI image under the GUI folder, what is the green orb/unlit grey circle for?