thanks alot. its been areal pain trying to work out what was going wrong.
why did the alpha dissapear? well :sorry but i have no idea what your talking about. the reason i wanted alpha channeling is because i am making a mod, and this file is part of the od that replaces greek flags. it didnt work, all i saw was a black box, but eventually (9:00 - 12:00!!!!) i found out that i needed to alpha channel the file. i dont have any software that makes alpha channeling work, so i had to put it to the forums.
and for a dds converter, just type in dds converter on google and download from one of the links.