snippet from wikipedia:
The Microsoft DirectDraw Surface (.dds) file format is used to store textures and cubic environment maps, both with and without mipmap levels. This format can store uncompressed and compressed pixel formats, and is the preferred file format for storing DXTn compressed data. This file format is supported by the Microsoft DirectX Texture tool (DXTex Tool), as well as some third party tools, and by the Direct3D extensions (D3DX) library.
in short, DDS textures take less space im ram (usually 1/4 to 1/6 of the original size, depends on the texture though) but still look pretty good.
The Microsoft DirectDraw Surface (.dds) file format is used to store textures and cubic environment maps, both with and without mipmap levels. This format can store uncompressed and compressed pixel formats, and is the preferred file format for storing DXTn compressed data. This file format is supported by the Microsoft DirectX Texture tool (DXTex Tool), as well as some third party tools, and by the Direct3D extensions (D3DX) library.
in short, DDS textures take less space im ram (usually 1/4 to 1/6 of the original size, depends on the texture though) but still look pretty good.