(updated the tutorial for Blender 2.53 Beta)
One of the struggles I face when UV texturing models is dealing with texture seams. But there's a few little tricks that can be used to surmount this problem.
Method #1: Smearing
It's a new feature in Blender 2.5's Texture Paint mode. This technique works best with rust/grunge type textures.
I'm going to use one of my robot characters as an example. Notice the seam in his texture.
With the textured object selected, go to Texture Paint mode. Hit T to bring up the toolbox and select the Smear brush.
Then just smear around on the seams of your model and watch them disappear. Don't forget to play with the Size and Strength values to get better control over smearing.
That's the technique. If you take your time, it's possible to blend your seams together with minimal manipulation of the texture itself. Practice makes progress :) And of course, the texture may need some tweaking after seam removal (because none of us are perfect...neither is Blender :P ).
Method #2: Cloning
This technique uses another UV texture layer as a clone source which is cloned onto the rendered texture.
The first step is to create a new UV layer. Name it some meaningful like "clone" just so you can easily tell it apart from the rendered layer.
Add in a texture that you would like to use as a clone source. Parts of this texture will be used to cover up your texture seams. Now find a seam on your model. (Remember to switch back to the rendered UV layer by clicking on it.)
Staying in that view, switch to the "clone" UV layer. In Edit mode (Tab), unwrap the model (U) onto the clone source using the "Project from view" method. The result should look something like this:
Switch back to the rendered UV layer and go to Texture Paint mode. In the toolbox, select the Clone tool.
Scrolling down in the toolbox find the Project Paint panel. Make sure it is activated. Make sure "Layer" is also activated. In the drop down menu beside "Layer", select the clone source (I named mine "clone").
Now draw on your texture seams. That should do the trick, but the end result may need some tweaking using Method 1.
I hope you found these tips useful. Happy Blending everyone :D