This handy little application that I found on the web will allow you to export TGA graphics files to Paintshop Pro or Photoshop for editing and then re-import them so you can create and edit the alpha channel. For easy transparencies simply turn the alpha mask to a negative. It will then save them as 32 bit TGAs suitable for changing into DDS files using the Bioware utility available here.
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Added Later:
I've added a small rar file with a ready made folder with all the necessary files & sub-folders to proccess tga & dds files. Just move it to you C:\ drive, put the files you wish to process in the "in" folder, open the command prompt & navigate to the directory and run the appropriate .BAT file. The finished result will be in the "out" folder".
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