Quote:Does the converter keep the default dds image size, or does it convert it to a "default" size?
you should generate textures in MeshEditor or WorldEditor - Material Editor window, it generates textures with the same size as the source. you can preview texture details when you drag and drop GFX file into Converter tool in "Show" mode, it displays resolution, mip maps and format.
1) preview- where are you making this preview?
GFX automatically generates mip maps, so once you preview GFX with mip maps, it can look more blurred, but it's just because of mip maps.
2) in what way? when using materials or "import image menu option"?
please remember that import image menu option in world Editor applies colors only to vertexes. so resolution of the image will depend on the density of the heightmap vertexes.
if you mean material, then you can scale each material using World Editor \ Material Brush \ Scale button, and then apply RMB on the terrain to scale selected material.