Item textures are a simple affair. A single 32x32 png file is standard, though you may use other sizes should you want super-HD items. The only rule is that the texture HAS to be a square with a 1:1 aspect ratio. Additionally, if you don't use a power of 2 (16x16, 32x32, 64x64, etc.) Minecraft will complain and the texture won't render right.

If you're having troubles making such a sprite, you can try throwing MTS into devMode. In this mode, when you're in the dev editor you can go to the Model Render section. This will allow you to render a sprite of any model in isometric form with the specified size and position. If you're in the default windowed mode, and have the GUI scale set to Large, then the HUD is exactly 32x32 pixels in size, so it's a simple matter of making the rendered model line up with a hotbar slot, pressing F2, and editing the png in your editor of choice to extract the item icon.

By default MTS auto-generates item JSONs for you. If, however, you want to have layered items, such as an overlay for right-hand-drive vehicles or colors for different part types, then you'll need an item JSON. These follow the standard Minecraft item JSON format, so go look that up if you're confused. For example, this is the most basic item JSON format you can have (and is the one auto-generated if MTS can't find a JSON to load).

{ "parent": "mts:item/basic", "textures": { "layer0": "<yourpackid>:items/XXXXX/YYYYY" } }

Replace XXXXX with the folder the main JSON is in. (i.e. If this is a part, replace XXXXX with the word parts). Then replace YYYYY with the name of the part/vehicle/instrument/whatever. This is the combined name, which includes the main name in the general section combined with the subName of the definition, if applicable. Once you do that, throw it into the correct folder and call it a day. Rinse and repeat for all items in the pack.