4. In order to keep the texture from being too harsh you need to blur the channel. With your channel copy still selected go to Filter>Blur>Gaussian Blur. I gave mine a blur of 2.0 pixels. Experimentation is the only way to understand how this will effect your image at the end so when you do the tutorial over try different settings for this step. Click OK to accept your settings.
5. Click on the RGB channel at the top of the Channels palette. This selects your composite image and allows you to continue manipulating your image. If you forget this step you will only be manipulating your channel copy and you will not get the results you want. You can click on the Layers palette again; we are finished with the channels. You will know you are working on the composite channel if your image is in color again (unless you have a gray image to begin with.)
6. Go to Filter>Render>Lighting Effects.
7. This dialogue box is very complex. The main thing to remember is that in order to use the channel you created you have to go to the Texture Channel section at the very bottom of the dialogue box and pop open the drop menu so you can choose the channel you created. Note how mine says Red copy - that is because I did not name my channel. For simple images like this that is OK but for complex images with many channels you might want to rename your channels so their names are meaningful.
