Current questions and answers regarding the map editor.

Yes, I read about this format on a forum somewhere at the beginning...
How do I insert a DDS file?

a) Install a graphics editor that supports DDS. For example, Paint.NET or Photoshop with a plugin.
b) Export the TGA file in the editor itself.

TGA files behave inadequately.

How so? Perhaps it doesn't allow you to create textures whose dimensions are not a power of two. I agree, that's a drawback.
However, exporting still happens faster than messing around with an archiver.