So I should use 1024x1024 or 2048x2048 and the planet will show in game even if it is compressed?... I remember having this problem even with namplates on the past and all of the times the smaller file was not working but the bigger one was showing ok.
Yes, although based on the MediaVP beam issues, some older GPU's have problems with too small compressed DDS files.
Also, you need to decide the compression on case-by-case basis. Some planets compress well without visible quality loss, while some (mainly those with a prevalent atmospheric gradient) can develope nasty artefacts.
If you want to try compression for planets with atmospheric glow around them, you should probably use dxt5 compression. If there's no atmosphere (like Moon or other barren rocks), dxt3 might be better. If compression doesn't work, you can use uncompressed u8888 format, which is huge but has no quality loss at all. On the topic of mipmapping, it is usually better to make the planets have just one layer of correct size, but on the other hand mipmapped planets can be used bigger and smaller so they are easier for mission designers to apply without making them shimmer in the game.
What utility do you use to convert the images to DDS (and which compression format have you tried)? I'm relatively sure