DDS conversion does not support compression. This is intended. DXT compression is very lossy ( see http://www.fsdeveloper.com/wiki/inde...sion_explained ), and graphics cards have plenty of video memory for uncompressed textures these days.
Support for reading and writing 16-bit uncompressed DDS textures is planned, as it would cut image sizes in half with much lower loss of definition than DXT compression.
A feature will be added to vertically flip a texture, as some in-game geometry expects a texture to be bottom-up, and it can be hard to tell until you see it in-game.
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