Where do you put the textures?

You need to buy the actual textures first. You can buy the 128x128 textures (which are cheapest, and have low quality), the 256x256 textures (which are pretty expensive, and are good quality), or the 512x512 textures (which are the most expensive, and are the best quality.)

Here's where you can buy the textures.
You can also buy them from the items board.