DXTn textures in D3DX9

[Stefan Dösinger]

You may find this helpful:
http://code.google.com/p/nvidia-texture-tools/

Wrt the legalese check the last question here:
http://code.google.com/p/nvidia-texture-tools/wiki/FAQ

Using a proven library for s3tc handling is a good idea even without the legal 
troubles. s3tc decompression isn't rocket science, but s3tc compression is 
harder than it seems. Nvidia, ATI and Microsoft have fought a long battle for 
the best s3tc compression algorithm. For a long time s3tc was considered bad 
because there was no really good compressor - so I recommend not to reinvent 
the wheel here.