A skin is a collection of text and graphical elements overlaid on the image (or surrounding the image). A controller skin, for example, includes graphical elements that allow you to manually control the outputted project.
The skin will be saved as a separate file (GGSK). If you want easy access to your skins files via the output settings, make sure they are saved in the Skins directory that is set in the
File tab of the Preferences/Settings of Pano2VR or Object2VR. Otherwise, they can be saved anywhere you like.