Hey cool! Bit hard to see at that distance, tho. Here's a tip... if you don't yet have it, download and install ModelViewer2K4:
http://home.metrocast.net/~chipartist/ModelViewer/ModelViewerWeb
That tool has been really valuable to me during my model/skin process since you can manipulate the camera around the character. Also great for screencaps.
Teamskin setup is pretty easy. As I recall, after creating and importing the red and blue teamskins to UnrealEd, all you need to do is add _0 or _1 to the end of the name. So if your texture name is "ravegirlbody," you would name the red teamskin "ravegirlbody_0" and the blue one "ravegirlbody_1." If you want to set it up for CTF4, _2 (green) and _3 (gold) should be made. The game handles switching.
... but don't quote me on any of this too strictly. The last time I did any modding for UT2004 was about 3 or 4 years ago.
I have an idea of why the two sided shading might not be working, but I'm not certain about it. I'd have to see more detailed pics or more.