Quote - I havent ever painted a skin texture for 3D figures, however I have done 2d portraits a lot.  Now in painting 2D faces and bodies it IS the highligths and shadows  which bring out the form and depth of the face [or whatever].

Yes, in 2D painting you are trying to create the illusion of depth.

Quote - What I think I'm reading  is that  in order for texture artists to avoid 'baked in attrocities' they should totally omit this shaping and forming with shadows and light; rely solely on the underlying mesh with lighting to provide those,  and  just paint a plain even flesh tone with only tinting/color differences and  possible blemishes at various areas.  Am I right in this assumption?  

Absolutely, because in 3D, depth is no longer an illusion. The combination of lights and shaders will, if they're set up correctly, accurately produce the shadows, highlights etc. required. 

Quote - What about with photoes used for texturing?  what exactly is needed there?   Doesnt even the most evenly lit photo create hilites and at least some shadows?

Any specular highlights, shadows and so on need to be eliminated. What's required is something as close as possible to the actual skin color, unaffected by directional light.

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