This is what happens when you use tools that obfuscate useful options, such as compression quality.
It's the same as exporting images to JPG or PNG using MS Paint. It sort of works but you lose quite a bit of control over the actual quality.
Also consider this - when DXT compression is used, the algorithm checks for differences in the colour channels and those can affect what ends up being in the final product. This is the main reason why, when converting normal map to DXT5nm mode, you have to make sure that the Red, Green and Blue channels are either filled with identical channel information, or alternatively the Green channel has information and Red and Blue are filled with black (zeroes). If there's different information in Red and Blue channels it will affect the contents of the Green channel. Similar properties of the DXT compression can cause this kind of colouration in a low-saturation image.
If you desaturate the texture so that all colour channels (red, green and blue) have the exact same information, you should end up with a cleaner grey end result, but you really should use a DDS export utility that allows you to set options such as compression quality, MIP map filtering options, number of MIP maps if relevant, etc.
In some instances, I seem to recall that FSO actually doesn't use MIP maps, so keeping MIP maps on the textures is just unnecessary file size ballast. And in other cases, the MIP maps are just plain unnecessary - one such case would be skyboxes. Or you might want to just include two LOD's - the 1:1 size and 1:2 size MIP map layers.
NVidia's command line texture utility is excellent and, for anyone even remotely familiar with command line operation (regular expressions and such), the batch operations are better than I've seen with any of the other programs that export DDS (Adobe DDS plugin, GIMP DDS plugin). Haven't personally tried Paint.NET DDS export, and I'm not sure if IrfanView supports DDS exports, but for me, the command line tools just work the best.
In addition to the good old nvDXT which works anywhere, NVidia also has something like DDS Texture Tools (don't recall the name exactly) which is also a command line utility, but uses GPU power to achieve much lower conversion times. The command line syntax is a bit different and I think you need an NVidia graphics card (which would be quite obvious), but the few times I tried it, it was blazingly fast.
Being more comfortable with the nvDXT, I've stuck to it for now however. And it doesn't require NVidia graphics card to work.