Ok, basically get your eraser brush and carefully remove the white outline from around the logo. Then either using a smudge or blur tool, go around the very edges of it.
Now, somewhere on your screen should be a layers tab. On this select the layer with the logo on it and change the mode. You can scroll through these until you find one which nicely blends the logo into the texture 
(I can't really explain layer properties very well...)
Also, This topic should have really gone into the help section (Unless you are going to turn this into a texture showcase thread)
Whatever; I'll figure something out. Thanks for trying to help, though. I'll try the layer thing, though.
I tried something different this time; I copied a bigger circle and pasted it over the white one so I could cover the shadows too, which I believe are the main problems. I set the blur rate to 100 -- the highest it goes -- and when you zoom out it looks really good. You can still kind of see traces of edit, but it looks a lot better than any of the images above.
I think the problem is the shadows and such. When I copy somewhere else on his hat that doesn't have the same shadow as the white area it's not going to look right no matter what I do. No matter how much I blur it still looks like a sticker or something because you can see the edges of the circle; it doesn't look like it's part of the hat, it just looks like someone put a sticker to cover the "L" and the white circle it's in.
Also, how do you produce high quality textures? I've seen some custom textures with unbelievable HD textures.
Well then I guess a mod can move this topic. I figured since it was about texture hacking it would go in the texture hacking thread; it's only common sense.
