3D paint option, I think you are talking about painting the texture on the model in the 3D window.  It is possible in Blender 2.4x too.  I'm using it to create the textures that come with the Beach Volleyball Set for Antonia, which can be found at http://sharecg.com/v/49179/gallery/Poser/Beach-Volleyball-Set-for-Antonia-1.2.0