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I am getting this error with dds images, eventhough the resolution for both width and height are multiples of four. So not sure why I am getting this error?
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I only use JPG, so what is a DDS image?
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It is a direct draw surface, that is used in video games.
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Do the images work if you convert to JPG and import the JPG files?
Also, Pictures must be RGB not CMYK http://forums.adobe.com/thread/1081681