Just in case anybody is interested, this is basically how i coloured the "acorn hunter" gift from  sharenwimbs

My explanations might suck so feel free to ask questions, also i'm not claiming to be an expert at this. Far from it really, I'm just an enthusiastic amateur.

Okay:

First i lock the image to be traced and then outline it with the pencil tool in illustrator. How accurately it follows the mouse pointer can be adjusted by double clicking on the pencil icon.

Then expand the selection and convert it to a live paint group and fill in the required sections. Easy!!

These will be moved to scraps at some point