[quote="Ashley":23bw05ox]I'm not convinced DDS stays compressed in video memory because I thought it's impossible to read from compressed formats efficiently on the GPU - is there documentation somewhere which says it really does do that?[/quote:23bw05ox]
It stays compressed in VRAM and decompressed is made on the fly because the hardware has specific native support for the DXTn compression formats.
[quote="MSDN":23bw05ox]To reduce the amount of memory consumed by textures, Direct3D supports the compression of texture surfaces. Some Direct3D devices support compressed texture surfaces natively. On such devices, when you have created a compressed surface and loaded the data into it, the surface can be used in Direct3D like any other texture surface. Direct3D handles decompression when the texture is mapped to a 3D object.[/quote:23bw05ox]
Documentation on the MSDN:http://msdn.microsoft.com/en-us/library/bb204843(VS.85
DXT compression isn't loss-less, but if it were possible to add the support to either use loss-less PNG or lossy DXTn for an specific texture and use it when needed, it'd definately be a great improvement over the current VRAM usage.