Hm... Tom, you are still using version 5 if I am correct... π
In SU 7, these are the (bit easier) steps:
First of all, make the one tree component you want to change unique (otherwise all will change). Right click and make unique.
Now edit the component and right click on the face that has the image you want to change and again, make the texture unique now (note that though you have a unique component already, it shares the same image with the original instances).
Now right click the face again > Texture > Edit texture image.
This will open the image in an external editor (you can define in Preferences > Applications) and you can paint it whatever you want. Upon saving the image, it will instantly reloaded/updated in SU.
Note that above I mentioned "faces". If inside the component, anything is in nested components/groups, you will need to enter as deep as to get to single faces.