I am working on new textures for the desert2 array and am curious about the best way to compile them back to dds.

I am using the photoshop plugin for DDS and the compiler when you save offers a TON of options.
Does anyone know how these originals were saved? Theres a large selection of 4-128 bit, signed, unsigned, with mipmaps and holy crap I have no idea what to do with this! hehe

I crashed the game with:
Runtime error 506 Could not load image at line 17548

Save them as DXT 5 format, with no mipmaps

DXT5_NM XY 8 bpp | using DXT5

DXT5 ARGB 8 bpp | interpolated alpha

I chose the top one and ticked the no MIPs flag.
The texture is a change to the default desert2 giving it more of a yellowish sandy look.

What I get after saving it is something like grayscale........but at far distance it looks right.
The attached screenshot shows the line

A little reading never hurts, all the formats can be read on line as to what they do.
Your top one is for normal maps, the next one is for diffused and specular.

Sorry Myke. I've spent 2 weeks the internet reading about GamGuru before I began asking questions here. This plugin I found through google that supports .dds for Photoshop seems to only offer those 2 options for DTX5. Since you are a developer, I kinda thought I should do what you said and ignore the logic.
There is no DTX5 with no alpha or NM.

DXT1 RGB 4 bpp | no alpha
DXT1 ARGB 4 bpp | 1 bit alpha
DXT3 ARGB 8 bpp | explicit alpha
DXT5 ARGB 8 bpp | interpolated alpha
DXT5_NM XY 8 bpp | using DXT5
3Dc XY 8 bpp | Normal Map
palette RGB 4 bpp | 16 colors
palette RGB 8 bpp | 256 colors
palette ARGB 4 bpp | 16 colors + alpha
palette ARGB 8 bpp | 256 colors + alpha
8 A 8 bpp | alpha
8 L 8 bpp | luminance
8.8 AL 16 bpp | alpha/luminance
8.8 VU 16 bpp | signed
8.8 CxVU 16 bpp | signed
8.8.8.8 QWVU 32 bpp | signed
16.16 VU 32 bpp | signed
5.5.5 RGB 16 bpp | unsigned
5.6.5 RGB 16 bpp | unsigned
1.5.5.5 ARGB 16 bpp | unsigned
4.4.4.4 RGB 16 bpp | unsigned
8.8.8 RGB 24 bpp | unsigned
8.8.8.8 ARGB 32 bpp | unsigned
X.8.8.8 XRGB 32 bpp | unsigned
16.16 GB 32 bpp | unsigned
16f R 16 bpp | floating point
16.16f GR 32 bpp | floating point
16.16.16.16f ABGR 64 bpp | floating point
32f R 32 bpp | floating point
32.32.32.32f ABGR 128 bpp | floating point

In a Skyrim forum I found them say DTX1 with no alpha.

I am having a problem getting my sand texture to show up correctly. It only shows up in some area around me and adding mipmaps to it didnt help.
Adding and removing mips to other texture don't seem to affect anything either.

use DXT5 ARGB 8 bpp | interpolated alpha

the terrain textures _D file needs to have the alpha in it so the textures blend together, as Corno says, DXT5 ARGB 8 bpp | interpolated alpha.

For the _N map, Just use the DXT1 RGB 4 bpp | no alpha choice

the Detailmap.dds is a greyscale copy of the Default_d.dds file saved as DXT1 RGB 4 bpp | no alpha choice format

then when you get them all complete, then erase the superpallet.ter file, and then run GameGuru.

Set a start marker and press test game.

Go to the metrics mode (tab tab) , and choose your terrain. should regenerate it and then show it.

I've used the gimp default dds export no problem (couldn't say what it saves as specifically) I also use Mindtex as well, again default seems okay in the main.

The alpha for terrain diffuse textures is the specular map at least I always assumed this as there is no separate spec to work with the normal. Without this you get a high shine on your terrain.

Use DXT5 for your diffuse and DXT1 for your normal map as suggested (normal doesn't use an alpha and saving with one will increase the file size).

That worked like a charm thanks a lot

Glad to hear that.

Correct. The spec map is imbedded in the alpha channel.