Location: Forest of Silence
The main problem I had with the original werewolf was basically that, while he was pretty scary, he felt more like a ghost than a werewolf to me since the thing jumps around so much it's pretty hard to make out what it is you're fighting. I decided early on that I wanted to change his color palette to brown to make him stand out more.
I remembered seeing stills of the movie Dog Soldiers (which I haven't seen btw, just screens) and I liked the idea of basically having a big muscled guy with a wolf head as a werewolf to give him more of a physical presence. I also thought this would highlight that essentially you are fighting a monster that at some point was human. So that was my early approach to retexturing.
However a couple people at Emutalk advised me to keep him as hairy as possible since otherwise it wouldn't be a werewolf.
I did cheat a bit with actually making him "hairy" though since the only thing I did was change the color of his body to brown.