First of all, I want to thank all who replied here, because in only 2 days i got this in the game 
but! there are a few problems yet!
You're welcome.
first, the nvDXT didn't want to work 
How does it not work?
Does it just not start when you type nvdxt on command line? It should show you an instructions page, but if it's showing something like "unknown command":
Did you check that it's in your PATH variable?
If it's not, you need to add the location of the nvDXT.exe into your PATH in order to be able to use it from other directories. The installer
should have done this, but if you didn't restart Windows after installation, the PATH doesn't automatically update.
You can check what is in your path by running Windows->Start->cmd and entering command PATH. It prints the currently active PATH variable (it's probably a long string of directories). If
C:\Program Files\NVidia Corporation\DDS Utilities is not there, the program won't work except if you run it directly.
In case you just don't know how to get started with it, here's what I would use:
Navigate to your image directory first, then enter
> nvdxt -file *.TGA -dxt1c -quality_highest -Triangleso I used another converter from tga to dds... the strange thing was, that after conversion, instead of 70mb(tga) it was 188mb(dds)!!! good compression hu? 
Okay, here's how it works: DDS files can take more space on hard disk than RLE compressed TGA files.
Run Length Encoding is a lossless format of compression that basically converts the pixels of the bitmap into a line of data, and blocks of pixels that have same colour can be marked as, for example, 512 x #000000 instead of 512 entries of #000000, so it can take a lot less memory in situations like this.
However, when the game reads a TGA file, the amount of video memory it takes is the amount that an uncompressed bitmap takes. For a 512^2 24bit file, this is about 768 kilobytes. It is not a coincidence that a non-RLE-encoded TGA file of size 512^2 is almost exactly this size.
To understand why games benefit from DDS files, you need to know that the DXT compression
doesn't need to be decompressed like the run length encoding of TGA files. Video cards can use DXT compressed files directly, without opening them to full uncompressed bitmap size, and
that's why they are beneficial in games. That, and the in-built mipmapping feature saves resources as well.
Typically, DXT1 compression reduces the size of single layer to about 1/6th of uncompressed data. DXT3 and DXT5 to about 1/4th of uncompressed data. DXT1 doesn't have alpha channel, while DXT3 and DXT5 have. For an effect like explosion we don't want an alpha channel, so you should use DXT1 compression.
second, the game doesn't recognize tga files... tried with them, and changed the *.eff to tga, but it didn't recognize the files... so I used the dds files instead 
188mb video memory here we go!!
Does too recognize TGA's. You're doing something wrong; describe how you set up the TGA files and the *.eff file.
And no, the whole effect isn't in the video memory all the time. If the DDS files take 188 MB of space, you do spend 188 MB of system RAM as the files are cached there, but as far as I know and if I haven't mistaken anything, the video card only uses one frame at the time. It doesn't (and it can't) keep all the effect frames in it's dedicated memory all the time, it would be full before you can say DIVE DIVE DIVE.
well, it worked but two more problems came about...
first, big ugly and very not transparent black box around the effect 
This means you converted to a DDS format that has alpha channel. This is bad because the original images probably don't have alpha channel so the DDS converter builds a completely opaque alpha channel for the file and... yes, you guessed it, now it has the black on edges specified as opaque. My guess is your DDS compressing software defaults to DXT5.
Save it without alpha channel (into DXT1 format) and it should work. Alternatively, use the u888 format, which means "uncompressed, three 8-bit channels" aka uncompressed RGB file. These DDS file types do not have alpha channel.
Although you should get it working with TGA's as well. It will save you trouble in the future if you learn that kind of things in the beginning.
second, the effect only plays for 1/4 way through and dissapears...
By gbtf67 at 2009-04-27
By gbtf67 at 2009-04-27
oh, and is there a way to make the ships exploding time longer? the whole breaking from middle to sides thing...
Can't help you with the effect ending prematurely; that sounds like a code-enforced limit to length of the animations. You could run debug build, and the debug log will likely tell use why it's cutting the animation short. It might also give clues as to what goes wrong with the TGA version.
Ships' dying times can be changed in the ships table files but I have no real knowledge on that field, and ships dying generally tend to be pretty mystic and partially random procedure (death time depends on the amount of damage taken at the time of death or somesuch stuff...).
