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Regarding .dds, that could be because of the quality loss. Even dxt5 mucks up textures.
Sorry the C185 was a disapointment to you Chris. I know I'll keep on flying it untill the day A2A or Realair comes up with a bush plane. 
(yeh, I've got the Cub)
But why are you guys so picky about Carenado stuff, yet still fly and paint default and aerosoft aircraft?
Thanks for the paintkit link - the sales blurb indicates that blank textures are "included". I don't want to get into semantics, but I know what included means to me.
What follows must not be taken as "rant". I feel that I must clear up a few misconceptions about FS aircraft addons. The following is based on many years experience in simulated flight. Read or ignore - I am merely trying to present factors for the cognoscenti to understand or learn from.
DDS DXT5 has a compression that is less lossy than the FS9 extended BMP DXT3. FSX should have no problems with DDS DXT5, after all, it is the favoured image compression in FSX. Then read the SDK - oh, no need. After all, a lot of devs don't bother either otherwise the Carenado stuff would also follow SDK naming conventions. (Yes - the cynic in me speaks).
Why be picky on Carenado over the default stuff? The default stuff is technically freeware on price comparison and Carenado is relatively expensive payware for the quality that has been sold us. Also, Carenado have been made aware of the flaps issue in their FSX models and despite the fact that their FS9 Cessnas had "correct" flap action, their modellers are incapable of adding the double cam action to their FSX fleet. The FSX Caravan manages to get more accurate detail on the one texture sheet than Carenado on six sheets.
Why did I comment about the texture.cfg idea? It's a excellent method to reduce filespace. There's planes that fill half a GB on users' hard discs - but with sensible use of the config, would only need a third of that disc-space, tops.
The quality of some Aerosoft aircraft is way better - and as for the Aerosoft Beaver and other models, please believe me, the ones I beta tested I was equally harsh on. The Bushhawk has not just good performance, the flaps are accurate and the performance figures were tested under real world atmospheric conditions as well as ISO and the fuel burn, power, acceleration, take-off and landing distances over 50 foot obstacles are accurate. I know - I spent a lot of time in consultation with Found Aircraft to get their data and test results under different conditions.
Then there's David Rowberry's UL - excellent with no interaction from me. The Aerosoft gliders were built by a RW glider pilot and the performance is excellent. The Catalina is also very good. I actually disagree with Aerosoft and Aerosoft people on a few things, but they have the best performing aircraft on the whole. Yes - I have plenty of criticism on their Beaver. The FSX version of the Dornier also leaves a lot to be desired (although the FS9 version is undoubtedly the most accurate FS model in almost 30 years). Other planes that let Aerosoft down in their move from FS9 to FSX are, I agree, their Supercub, their Katana and the Piper PA31. All good in FS9, all less than mediocre in X. But at the price still relatively good. (has anyone actually spotted the modelling and mapping errors on the Do27 yet?) And yet... all the "Aerosoft" planes were made by non-aerosoft developers. Aerosoft "merely" sells on behalf of many developers. Just like FSaddon and simmarket and all the others. The even sell Carenado planes...
But when a developer ignores (and continues to ignore) feedback from the public, then that is my reason for being more picky than usual. It's not that the Carenado issues can't be fixed - they can, and relatively easily at that. The Found Air Bushhawk flaps suffered the same issue - Thorsten Reichert listened. Animating the flaps and creating a correct rear wingspar format did not take him excessive time. Other devs that listened to mapping critiques have also shown me that mapping issues are easy to fix - most notably LIC and their Cristen Eagle. Kev remapped the wings to allow asymmetrical paints at my request and almost as fast as he answered my e-mail.
I do not claim perfection as my right. I am by no means that good. But I know what FSX is capable of and I know both theories of flight - I learnt Bernoulli and I teach and preach Newton. I have been a teacher of the theory of flight and I am an aircraft engineer. I try to get things as right as I can and I know that I am by no means the most knowledgeable on any of the subjects.
And yes, I have been on betatests where faults have got through despite my claims. Beta testers aren't perfect and don't get paid. Yes, they may well get a copy of the model free, but when you think that beta testers often put many dozens of hours into their efforts, then fifty cents an hour and less is nothing - the electricity costs us more...
And finally, there is no professional set of standards for flight sim modelling - which really is a pity, because until there is, we'll continue to suffer lack of accurate scale, performance, detail, function etc. on almost every new FS model that hits the market.
Price? The RPG faction out there and the GT5 players and the EA supporters pay upto (and sometimes more than) $50 for a game.
I am an evangelist for better standards, but nobody wants to see the emperor's new clothes.
