Thanks alot for the information. With it being a year later what software would u recommend today ? I'm ready to start printing but have to secure solid software WITHOUT A LOAN.
I have tried to do a color separation using Photoshop and Illustrator CS6 without success. I have followed your method and others with the same result. The artwork I am working on is a customer's logo that was scanned from a business card. In looking at the image close up I believe the image was taken from a woven or embroidery design and so the colors are not "solid. Any advice you can offer on how to separate this would be greatly appreciated . I can send you a copy of a part of the logo if you advise how. I suspect this is common that is working from scanned images. I am sure this will help other mewbies as well.
An idea: in PS, go to Image-->Mode-->Indexed color. Make a custom palette. Use just a few colors (2-4). Indexing will map similar colors to the closest.
Your videos are fantastic! I'm gearing up to start my first print, thanks for taking the sting out of it! Check out my channel if your looking to learn some stuff about making stuff out of wood!