Oi, use your f'n eyeballs mate. Here is the fix ya bugger.
Code:
<Object ext="true" type="0xc33" id="Conducting Wand" setType="0x2aa2" setName="Archmage Skin Set">
<Class>Equipment</Class>
<Item/>
<Texture>
<File>lofiObj3</File>
<Index>0x1b2</Index>
</Texture>
<SlotType>8</SlotType>
<Description>{equip.This_wand_is_powerful_at_conducting_magical_energy_into_a_d}</Description>
<RateOfFire>1.25</RateOfFire>
<Sound>weapon/wand_of_death</Sound>
<Projectile>
<ObjectId>Directed Explosion</ObjectId>
<Speed>170</Speed>
<Size>50</Size>
<MinDamage>55</MinDamage>
<MaxDamage>130</MaxDamage>
<LifetimeMS>471</LifetimeMS>
</Projectile>
<ActivateOnEquip stat="28" amount="4">IncrementStat</ActivateOnEquip>
<ActivateOnEquip stat="27" amount="4">IncrementStat</ActivateOnEquip>
<BagType>6</BagType>
<FameBonus>4</FameBonus>
<OldSound>magicShoot</OldSound>
<feedPower>900</feedPower>
<Soulbound/>
<DisplayId>{equip.Conducting_Wand}</DisplayId>
</Object>
<Object type="0x2aa4" id="Archmage Set Skin">
<Skin/>
<Class>Skin</Class>
<AnimatedTexture>
<File>playerskins16</File>
<Index>07</Index>
</AnimatedTexture>
<PlayerClassType>0x0325</PlayerClassType>
<UnlockSpecial>Set Skin</UnlockSpecial>
<NoSkinSelect/>
<DisplayId>{skins.Archmage_Set_Skin}</DisplayId>
</Object>
//You had the skin inside of the wand object.