First thanks for taking the time to write this up! Now...I get to step 6 and don't get a .CDDS file. The DOS window pops up for a second then closes and I get an error and TexToDDs text file in my A-10-UPGRADE folder. the error file is blank and the TexToDDs one says:
TexToDDs.exe -noise <Source Tga file> <Dest dds file> <alpha decrease by miplevel>
TexToDDs.exe <InDir> <extention> <OutDir>
TexToDDs.exe -complex <InDir> <extention> <CDDS FileName>
TexToDDs.exe -dump <CDDS FileName> <OutDir>
TexToDDs.exe -single FileName format mip outfilename
TexToDDs.exe -xml <Project FileName> <CDDS FileName>
What type of file to you need to "add to file". I've tried .bmp, .tga, .dds, all with the same result as above. I must be missing something.