Large scenes with lots of textures have been problematic until now,
because 24bit uncompressed textures quickly eat up graphics memory.  I
have just updated the DDS backend to use Nvidia Texture Tools 2.0.
This package provides "nvcompress" a CUDA enabled DDS converter.  I
have tested DDS output with OpenGL, so it looks like DX1 is compatible
on all platforms.

http://code.google.com/p/nvidia-texture-tools/

To convert your textures on export to DDS just select "dds" from the
"convert images" option.  This also sets dds to always be the default
output type, so if you exit and reopen blender preview-in-tundra will
also convert to dds.

In Tundra you can confirm your dds files are saving you memory by
going to "Profile>Textures"

http://blender2ogre.googlecode.com/files/b2ogre-0.5.6-preview2.zip

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