I'm currently working on an african american NPC and his skin tones between his head and body are hugely mismatched. Is there any other workarounds for this than to turn the ESP into a master? If turning the ESP to an ESM is the only way please tell me all of the things I need to avoid to keep it stable, I know there are issues with workplaces in an ESM using any imagespace other than default but that's it. This is part of a worldspace mod so I need to be sure.

I believe those skin issues were introduced by the geck 1.5 update, though modding without that update wouldn't be smart.
I know you wont get those skin mismatches, or they won't be as bad if you don't adjust the custom NPCs default skin tone or facial shading, or radically change the face shape.
Make sure you have bLoadFaceGenHeadEGTFiles=1 in your FALLOUT.INI file.. it's in the My Documents\My Games\Fallout 3 folder.
Make sure the custom NPC has 'can be all races' selected.
Making your mod an .esp with an .esm header (using FO3Edit) seems to be a fairly common practice, and it does seem to fix the skin tone issue. Only other issues I've heard of are 1 or 2 specific navmesh issues, though I've never ran into the problem and don't know the details of it.

There are TWO problems like this with different solutions.

When on an intended-black NPC you have a no-color head, that is the .ini file adjustment in the post above.

When the body is no-color, that's the esm/esp issue. NPCs defined in an .esp file will look like that. It has to either be an .esm, or, you make it into a sorta fake-esm by using FO3MasterUpdate, those operations are done in all cases using FO3edit. It's not about the filename itself, its about how .esms and .esps have some different setups internally.

If you rename FO3edit.exe to FO3MasterUpdate.exe, when you run it, it'll read which mods your game is set up to load, and it'll convert every .esp you have into an .esm (but it'll leave the name as .esp - - the .esm/esp is an internal thing, not the name really). The program renamed to FO3MasterRestore does the reverse to those .esps. While in .esm-converted form, your .esps wont have the black-head-white-body problem.

The black NPC I made looks horrible if either of these problems happen. Looks decent otherwise tho. http://www.finhosting.fi/~fallout/screenshots/Deisha.jpg . heh.

Ok thanks guys I'll keep this stuff in mind.