So, first things first, I use GIMP, it's free, so I use GIMP. I don't know anything about Photoshop so I will be unable to answer questions about it.
Download GIMP from here
http://www.gimp.org/You will need a DDS Plug-in as well
http://code.google.com/p/gimp-dds/Google will help you figure out how to install the plug-in.
So after you load up GIMP and choose to open a DDS file I get this dialog box.
I uncheck the mip maps box to make things simpler and I don't care if that dialog ever comes back.
This is how your texture should look
It is transparent because of a layer mask, so we should turn that off. In the layers bar, right click the layer, and choose to Add a Layer Mask. (this is also called the alpha channel)
This will allow us to disable and edit the layer mask. This dialog box will pop up.
We want to transfer the alpha channel to the layer mask.
Aaaaand nothing will change. Except now we have a few more options to play with if we right click the layer.
If we click to [Show Layer Mask] it will look like this.
If we click to [Disable Layer Mask] it will look like this.
Note that unless you uncheck the [Edit Layer Mask] option you will be unable to edit the "real" texture (in this case the green jersey), you will just edit the Layer Mask.
For more information on Alpha Layers/Layer Masks check out this thread.
viewtopic.php?f=138&t=76405For the sake of changing something, I selected the green of the jersey and terribly recolored it black. For tips on the tools available in GIMP, you should check out Google and YouTube, there are tons of tools and techniques that I am too bad at to teach others...thankfully, this being an open-source program, there are tons of resources as well.
That image was taken with the Layer Mask both disabled and with the [Edit Layer Mask] unchecked.
After you are finished editing your texture you want to right click the layer again and [Apply Layer Mask]
Your texture should go transparent again.
Now it's time to save it, but it's not as easy as it sounds. If you are using the Mod Tool to import the texture back into an iff file you need to be sure to match the exact compression and dimensions of the original file. All the dds files also have mip maps, so you need to be sure to save with those generated as well. This information can be found in the bottom left corner of the Mod Tool.
Knowing that this texture is a DXT5 compression and 1024, 512 and has mip maps will help with the next step.
Now if you just hit save in GIMP it will not allow you to edit any of the compression information, so we need to hit SAVE AS
Once this dialog pops up you need to be sure that you have the .dds extension in the save box. Instead of having a drop down box that lets you choose what file type you want to save as, you need to manually type in the 3 letter extension like dds, png, bmp, jpg.
Finally this last DDS dialog box will pop up asking you for compression and other parameters.
We need to hit the drop down box to change the compression to DXT5 and check the Generate MipMaps box.
If no errors pop up, you should be all set to import this texture back into the iff file with the Mod Tool. For help with that, check out this thread.
viewtopic.php?f=138&t=80851Let me know if there is anything else that needs clearing up.