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Client Editing is a delicate subject. osRose and osiRose will not support or use any Client Editing tool or results as a standard. So you are free to experiment, test, and develop there on Client Editing, but at your own risk
it's because dds files use generated mipmaps. you have to make the dimensions of the image a multiple of four(preferably a binary number, 64,128,256,etc) so it can generate them.
the alternative is to ignore the error message and choose to save it in 'image mode', which can be any dimensions. also tell it not to generate mipmaps.