FATAL ERROR!!

[Cactus Dude]

I still haven't figured out what exactly the wads are for. I'd like to say that it houses some custom level skinning images, but many maps don't have them...maybe it's just cause they mooch off of the original wads that come with the original CS maps?

I'm confused.

Yeah, its pretty much like that.
Most of the "original" maps already come with the wads already installed but some of the custom maps and older maps no one plays anymore requires their own wads.
Each wad comes with custom skinning images, like you said.