Since the second part to the Life Aquatic update, choosing custom skins (by loading from a downloaded picture file) doesn't change my skin until after a client restart. I'll select the new skin from a file and when the game prompts me to choose the arm size, it still shows the old skin.

It's not just on my client's end either, as someone playing on the Xbox through LAN doesn't see my skin change either..

This applies to changing skin from the main menu and in game.