SUMMARY:

Before the 2D version of the model--the UVW mapping--can be exported for painting, the UV pieces need to be organized optimally inside the Zero-to-One square.

Unwrapping is an art. Pay close attention to how the final UVs look, so as to be clear and comprehensible to other people in the production team.

Apply Unwrap UVW at the object level (i.e., with no sub-object level selected).

Hit [Edit] and follow 4 critical considerations (ordered by importance)
to put all elements in the 0-to-1 square:

        a) REDUCE SEAMS: Stitch together related parts (like the flesh on lower and
            upper arms). Different materials should NOT be stitched (like flesh to cloth).

        b) GROUP BY COLOR: Group by cloth, flesh, etc for easier texture painting.

        c) PRIORITIZE: The most noticeable or detailed parts get more space.

Right now the UVW mapping, as visible in the Unwrap UVW modifier Editor, looks something like this, with all the parts outside of the 0-to-1 square.

 
 A) REDUCE SEAMS:
Stitch together related parts like flesh on lower & upper arms. Different materials should NOT be stitched, like flesh to cloth. Select pieces that are in the wrong place, Right-click to choose “Detach Edge Verts” (or choose the option from the Tools menu). The pieces can then be moved out.

Select the vertices for the destination of each piece, Right-click and choose “Stitch Selected.” The piece will snap and weld to the destination.

Sometimes (not pictured here) selecting all the destination vertices results in undesired welding across the structure. In those cases, choose only a could of vertices that do not share with the other side of the model, and when the desired object snaps use Weld Selected or Target Weld to clean it up.

Multiple green lines can be welded at once. Be careful, though, that after hitting weld selected you have not welded any vertices that you want to keep seperate (any vertices that are too close together will get welded: scale UVs larger or work with unwelded verts a pair at a time if you get unwanted welding).

To move the seam, move a strip of poly UVs: select all the vertices, Right-click to choose “Detach Edge Verts,” select the vertices on the destination side, and Right-click to choose “Stitch Selected.”

Use Tools/ Target Weld to clean up seams vertex by vertex, like on the back of this neck line.

Separate UVs and stitch according to body part and color.

In the example below, the shirt and leg/socks each have a part of the shorts attached to them. These parts of the shorts must be detached and stitched together to remove the seam (see the change in the green lines on the actual model). The socks-strips are also separated from the bottom of the leg in this example.

Finally, it is time to separate the top and the bottom of the hand.
Convert the model to Editable Poly in order to bake in the Unwrap modifier.

Select the polys just on the bottom of the hand and wrist and apply the Unwrap UVW modifier.
Hit the [Edit] button to view the UVs.

Select all the visible vertices, Right-click and Detach Edge Verts.

Close the Edit UVs dialogue and Right-click on the model to convert to Editable Poly (to bake in the Unwrap UVW modifier). Re-apply the Unwrap UVW at the Object level and hit the [Edit] button to view the UVs.

Both top and bottom of the hand are now visible. The UVW Planar map that mapped the hand caused the top UVs to be mapped correctly but the bottom UVs to be flipped. To stitch the wrist to the hand, then, either the bottom UVs of the hand or the bottom UVs of the wrist will need to be Mirrored vertically. In this example, I mirrored the wrist and then Right-clicked for Stitch Selected.

With all pieces properly stiched, it is time to fit everything into the 0-1 square.

 B) Group by Color:
To make the painting process easier and the map comprehensible, try to put related parts of the character near each other in the map (skin with skin, etc).

 
 C) PRIORITIZE:
The most noticeable or detailed parts of the model get the most space in the final UVW zero-to-one square. For example, real human faces only cover about 1/20th the total surface area of a body, but our 3D character faces usually have a disproportionate amount of detail important to our audience, so we usually give the face 1/5th of the final space. On the other hand, the less-visible feet bottoms usually get very little space.

Sometimes we stretch the UVs at joints (elbows and knees) so that more pixel art can be packed in those area to be revealed (and for the texture to not look stretched) when the joint bends.

 
 D) OPTIMIZE:
In games and film, significant empty gaps in a UV map wastes resources (why use a larger map that will have to be processed for every frame if a smaller map could contain the same information once the wasted space was removed?) and opportunity (why can’t the important details be higher resolution if we have so much space available?).

The space between pieces in a UV map is called the “gutter.” The width of the gutter depends on the painting process. Generally, it is important for all UV pieces to stay inside of the 0-to-1 square and to be at least 3 pixels away from each other so that they do not overlap. NOTE: The actual representation of UVs in the UV Editor is at least a pixel inaccurate, so do not depend on being able to line up pieces exactly next to each other.

To use Zbrush or another high-detail modeler to add a Normal map, leave at least a 5-pixel gutter between all UV pieces during the Unwrap process.

Mirroring UVs (by unwrapping one character side and allowing most of the UVs on the other side to remain flipped underneath the first side) efficiently uses less UV space for what is intended to be duplicate, symmetrical areas.

Now that you have all the pieces stitched, fit them neatly into the zero-to-one square (the dark blue square outline). Remember to keep them grouped by color, to allow more important areas to scale larger, and to optimize the space through re-arrangement and scaling to make smaller gutters.

In this example, space is intentionally left empty in the bottom for the other half of the torso front and back.

The full half-character is now unwrapped and ready to be mirrored.
Right-click to convert to Editable Poly to bake in the UVW work.

Mirror the body (the pivot should still be directly in the middle).

Select the original side, hit [Attach], and hit the other side to make one object.

In the sub-object Vertex level, in the Front view, select the middle column of vertices and non-uniform Scale on the Y-axis to bring the two sides perfectly together (In case the pivot was not directly in the middle).

The next step is easier to view with a plain material.

It is now easy to see the broken, unwelded seam down the model center. Re-enter the Vertex sub-object level.
The center vertices should still be selected. Hit Weld Selected to collapse the vertex pairs and fix the seam.

Re-apply the material with the checker texture. Note that the checker material is mirrored on the model, because the UVs on the left side are copies of the UVs originally designed on the right. The left-side UVs are therefore flipped and sitting underneath the UVs on the right.

Apply the Unwrap UVW modifier, hit [Edit] to open the Edit UVs box, and turn on Select Element at the bottom.

Grab the left half of the torso to move it out from behind the right half. Confirm you have the correct side by looking at the vertices selected on the model (you may need to turn on a sub-object level of the UVW Modifier in the stack).

Mirror the UVs horizontally.

Select the center line on the right-side UVs and Right-click to use “Stitch Selected” to stitch the two sides together.

Do the same with the torso back.