(October 6, 2017)
Wally is considered by many to be the de facto texture and WAD manager. With it, you can add, edit, and delete textures from existing WADs, as well as merge ones with equivalent formats. It supports many texture formats; Quake and Quake II textures, including the ones from SiN, Serious Sam, and Heretic II, are supported in addition to the more general JPG, PNG, TGA, BMP, and PCX formats. Textures of these formats can be ripped from PAK files, exported out as loose files, or imported into WADs for distribution with maps and importing into level editors.
In addition to being able to create and edit existing WADs for both Quake and Half-Life, Wally is also an image editor, letting you do brightness, contrast, sharpening, noise adjustment, blurring, image resizing and rotating, image offset, or just plain drawing on your textures with an airbrush.
Wally has issues with 32-bit alpha channel TGAs and PNGs. It's recommended that you use a tool like IrfanView to strip these files of their alpha channel using the "Save As..." command and deselecting the "Save Transparent Color" checkbox in the encoding settings. IrfanView also contains a batch converter if you need to strip an entire folder's worth of textures.
Wally's manual is also available below, demonstrating some of the key features of the program, such as making textures from scratch using its image editing tools.