Originally Posted by Dexyd
any way to make textures from JPG files?


Yup, open up with any image editor that supports DDS export (I use Paint.NET), save your JPEG as DDS and move it to the location you want to use, eg. Data\Public\%myMod%\Assets\Textures\...\something.dds.

Then open the Resource Browser, create a package for your stuff in your mod if you haven't done so, click the Add Resource icon at the top, select Texture, browse to .dds file and give your new texture resource a name.

If you're importing images without an alpha channel, or with an 1-bit alpha channel, save the DDS with DXT1 compression.
If you're using more than 1 bit for the alpha, export as DXT5.
If the DXT compression artifacts are very noticeable (may happen for certain kinds of textures), import as R8B8G8 (no alpha) or A8R8G8B8 (alpha).