Now about your question. I think I wrote this clear enough, but it appears that noone botters to read it and to understand it.
I don't see anywhere here GFX-ALL.Step 4: Now open and edit the textures you want with an image editing tool (PhotoShop, Gimp, Paint... ).
Note: Only 256*256 TrueColor BMPs are supported!
Step 5: Put the edited file in the VIEW directory and replace the original one.
Step 6: Use Command Prompt (StartMenu --> All Programs --> Accessories --> Command Prompt) to start BMP2GFX.BAT. With it you can convert the edited BMP files back to their original GFX format. Use bmp2gfx filename.bmp to convert a file. The new file will automatically replace the old one in the RAW directory.
Step 7: Finally double click on COMPILE.BAT to build the new filesys.dat. The old one will be autamotically backed up.
And actually have no idea, why are you using it and then complains that you don't understand why it don't work.
OK, let try making things a bit clearer by explaining what is what in those folders (although I already did that once).
The VIEW and the RAW folder contain practically the exact same files only these in the RAW files are converted in some unknown format, that no known Windows application can work with. That is why sorcerer uses CONTINUE.BAT to convert them to Bitmaps and to 3D models in known formats. Those are placed in the VIEW folder.
What you edit are the files in the view folder. After you are finished editing them you put them back in the VIEW folder replacing the original ones.
So now you have different files in the RAW and in the VIEW folder. These in the View folder are newer. What you need to do now is converting the edited files from the VIEW folder in files from the RAW folder, because these are the ones that will go in filesys.dat in the end. Here you use Command Prompt and the program called BMP2GFX.BAT to convert them and not GFX-ALL. What GFX-ALL do is practically to convert all GFX files from the RAW folder in files from the VIEW folder. This is something that you do the first time when you start CONTINUE. It is actually exactly the opposite of the thing you want to accomplish.
So are we clear: Command Prompt and BMP2GFX.BAT.
You start Command Prompt the way I described in step 6 and then you must reach you View directory. Use the following commands for this:
cd.. - Go back one directory
cd Directory name - enter a directory
dir - show all files and folder in the current directory.
Now after you are in the View directory you use BMP2GFX.BAT to convert your files.
You type in Command Prompt the command I described in Step 6.
bmp2gfx filename.bmp
For filename you use the name of the file you want to convert.
And basically that's all. After that you must just start Compile and you're done.