Now that 32-bit ci textures are available, you don't need to worry about that 256-colour nonsense, and can save the textures in all their high-colour glory.
However, if the texture ever has a different palette applied to it (I don't think this technique is used in the N64 Zeldas - but for instance in Smash Bros. it's everywhere) the 32-bit textures are dumped
after the palette is applied, and thus you will need to save the palette-swapped texture yourself (with the different colours and everything) as a seperate file.
I believe the Zelda games only make use of 'tinting,' (ie, when you get cursed or take damage, I think) which is different from ci palette-swapping and you certainly don't need to worry about that.
You can still save the ci textures as 256-colour indexed images, which are read by the plugin before the palette-swapping step, and show up correctly using just the one texture. Of course, this isn't necessary for Zelda; as I said before, I don't think the game ever changes the palettes around.
Using beta 10 is essential. Some of the later versions (I think 6 and 8?) changed the way many of the textures are read, and will have different names if dumped in these versions. Beta 10 is the standard for the entire community, so if you release a texture pack, we would appreciate if it was beta 10-compliant.
Get it here. (you'll need to copy BMGlib.dll into your emulator's main folder)