SkinPick your skin colour very carefully before you start. I usually go for something in the orange/pink/white range, and make it fairly light. What colour you use is really up to you, but keep in mind that some colours shade better than others.
Create a new layer and set it to Multiply, as before.
Base colourLay down your chosen base skin colour -- don't worry if you cover the mouth or whites of the eyes, since you'll be cleaning these up later.
CleanupThen clean up things with the eraser... messy edges, eyebrows, hair, mouth and any other bits that aren't skin.
Now for the hairline and whites of the eyes. Use the Eraser tool and a medium soft-edged brush to soften the line where the skin meets the hair (or eyes). The bigger the brush, the softer the effect will be.
Hairline before erasing
Hairline after erasing
Eyes after erasingSave again, and now you can shade the skin!
DodgingDo the highlights first with the Dodge tool (either highlights, 15% or midtones, 50%). Make sure you pay attention to lighting, matching the highlights in the eyes. A light spot on the darker cheek tends to look good.
BurningThen use the Burn tool (midtones, 50%) for shadows. Don't forget about where the light is coming from! Flatten the image, save again and it's time for the hair.