Our engine ( DirectX based ) uses DDS principaly and i can affirm you it was a sorting issue. Because developers have corrected the problem. If the sorting is correctly done, you don't see any border on your alpha. Then, I've never seen a background color ( other than black ) in a DXT1 DDS; created with the ATI or Nvidia…
funshark: yes i agree if the sorting is done correctly you don't see any border at all. However that is assuming you have to do any sorting in the first place. The problem here was that the converter it did 2 light checks instead of 1. So first applied was a ambient which was pretty dark. Then on top of that there was a…