ROFL - nevermind!!
The hot pink color I set as a back ground was the problem all along..
removed it and fiddled around with the DDS settings in photoshop and got it to work properly.
this is nice.. what was a 2mb graphic file is now 513kb.. a quarter the size.
gonna make some more adjustments and upload the new dds release.
btw.. here is the dds photoshop profile i used..
http://www.kithicor.org/jethal_eq_profile.dpf
in case anyone needs it.
Jethal - Emarr