Did you create UV maps for the model? A texture as is would cause this to happen. What version do you have (help > about in WED)? First, select the faces of the model you want to texture. If you have 6.40.5, go to edit > create x-sided mapping where x is 2 or 6. 2-sided is quick, but otherwise doesn't give you much flexibility. 6-sided takes longer to work with, but gives a lot more flexibility. If you have a version prior to 6.40.5, access the skin edittor and go to edit > create MD2 mapping.

If this isn't the case, is your model in pure shade or has the ambient_x values been messed with? If ambient_red, ambient_green, and ambient_blue of a material assigned to the model all set to 0, you'll have a model that is all black.