I asked someone who has access to the evaluation kit, and the sample program's output is a DXTC-compressed .dds file with the full mipmap chain, so I guess it does indeed (now, I wonder how good/bad the compression quality is, though... If it has to do it at loadtime, I fear it'd focus more on speed than quality, meh!)From that description it looks like it can generate compressed textures directly
As for the thing I said I was working on, I guess I might as well scrap it. It was a way to further losslessly compress a DXTC file (to save storage costs, not GPU cycles!), and while the initial results I had were promising and were able to beat bzip2 slightly, I then tried to compare it against LZMA. Needless to say,I got smacked down, sigh. Ah well, better luck next time I guess! (and fwiw, LZMA is a really, really impressive thing...)
Uttar