For what it's worth, Ed, I had exactly the same problem doing building textures - the moment they hit bitmap, any quality they had was gone (I was using PSP8 at that point).
My preferred method right now is as has already been mentioned, to work in .pspimage (I'm using PSP X2 now) and save as .psd, then use imagetool to convert to DXT5 and save as .dds (imagetool does the flipping for me).
Everyone does it their own way, obviously, but I agree entirely that going through bmp and then converting that was the worst method for loss of detail.
Ian P.
My preferred method right now is as has already been mentioned, to work in .pspimage (I'm using PSP X2 now) and save as .psd, then use imagetool to convert to DXT5 and save as .dds (imagetool does the flipping for me).
Everyone does it their own way, obviously, but I agree entirely that going through bmp and then converting that was the worst method for loss of detail.
Ian P.