I am converting some files to dds and I'm a little confused about which DXT versions of dds I should be using.

For diffuse textures with no alpha should I use DXT1(no alpha) ?

Also I have normal maps which contain specular maps in the alpha channel. Will DXT3 be poorer quality but smaller file size then using DXT5?

Also should I create mip maps for normal map textures or not?


thanks so much!

For diffuse textures with no alpha should I use DXT1(no alpha) ?

Yes.

Also I have normal maps which contain specular maps in the alpha channel. Will DXT3 be poorer quality but smaller file size then using DXT5?

Apart from DXT1 all of the other formats are the same size, so at this point you only need to consider quality. Different formats will work best for different kinds of images (in particular sharp detail vs gradients), but I've found the best thing to do is to try each of them and compare screenshots. This will give you a much clearer picture than debating the theoretical pro's and con's of each one.

Also should I create mip maps for normal map textures or not?
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You probably should use mip maps unless you anticipate a particular problem. Rendering with mip maps is faster than without because the graphics card has to process less texture data on average and also tends to get better cache performance.