I can try and explain really quick.
So basically, you should ignore the DDS's, these files are generated automatically by the RC (Resource Compiler) so, just ignore them and leave them alone.
When you're working on a texture, say this texture is a 2048*2048, you export it using the CryTiff exporter, say change your parameters to NormalMap_LowQ, 1024*1024 on PC, and 512*512 on console.
It will export a .TIF file, if you open this file in photoshop, it will be a 2048*2048 texture.
Now, a couple seconds after exporting, the RC will also generate a .DDS automatically, with the same name, and this will be a 1024*1024, this will be the texture that the engine will actually use in the game, ALTHOUGH in the material editor you input the .TIF, not the .DDS.
If you run a build on a PS3 or XBox, the .DDS on the build will be a 512*512. (No TIF files are ever put in the .PAK files of the builds)
So the .TIF works as a reference for the .DDS's.
Last edited by [HP]; 04-12-2012 at 03:01 AM..