The label.eps file was produced with the commands
dvips -E label.dvi -o label.eps
The file combined.eps was produced by modifying the PSimport.template file in the directory above. For each of the labels there were two text inclusions in combined.eps: (1) setting up embedding coordinates for the label and (2) including the label EPS file itself. Plus a little extra! In order to preserve your sanity, whatever code you put in the preface to each file should relate somehow to the placement of the figure.
For convenience in development, the combined file does not actually include the EPS files, but uses the PostScript command run instead to load them dynamically. This is more convenient to work with while you are adjusting the labels, but in the final version, the lines where this is done should be replaced by the files' actual contents.