Uninstall the nvidia plugin, it's way out of date, and IIRC doesn't have many features. Reinstall the Max one. I'm not using Max 2008 yet, but in Max 9 the DDS plugin is \stdplugs\dxplugins\dxDDS.bmi.
So every time i try and install the nvidia plugin to use dds in 3ds max... it doesn't work. No matter what i do i don't seem to be able to use dds files in 3ds max. The first time i installed it Vista said it didn't install correctly and then didn't work. Now it installed correctly, supposedly but i can't actually use dds…