Now that you understand the way the material is setup we can get to work on the map channels. Go all the way into the Diffuse color slot of the Label material and change the Map Channel setting to 2. You will also need to do this to the Mask in your Blend material so that the UV's for both of these maps can be changed at once.

Now that our logo and mask have their own Map Channel we are ready to edit some UV's. You only need to edit the UV's on the polygons where the label will be. A quick way to select those is to go into polygon mode and set the spinner next to Select ID to 2 and press the button.

Once you have the polygons selected you can apply a UVW Mapping modifier to your object. Change the Mapping type to Cylindrical and change the Map Channel to 2. This step is extremely important since you already changed your bitmaps to Map Channel 2. If you apply a UV map in Map Channel 1 you won't see any effect. Go ahead and render, you should now be able to see the label on your bottle.

Now that we know everything is working correctly, all we have to do is adjust the label so we can see it. You can use the Move, Rotate and Scale tools to adjust your gizmo so that it fits around your bottle where the label is located. Notice that the green line on the gizmo is where the bitmap begins, so place that where your label should start. Once it's in the right spot you can tile the image until the label fits on the mesh. The image below shows the label aligned correctly.