Slin. I found that the memory bandwidth when using 4 textures + blend texture + normal maps on a multitex terrain to be just a bit too much (with texs @ 1024x1024). DDS files reduce the memory requirements by 60%+ and therefore better cache performance on the textures.
Just in case you were interested, I use 7 textures total:
1 x 1024x1024 for blendmap with static shadowmap in alpha channel.
3 x 1024x1024 ground textures, the fourth ground tex is in the alpha channel of the other 3 ground textures eg. the other 3 textures hold 4th r,g,b channels in their alpha channel.
3 X 1024x1024 Normal maps, again, 4th texmap rgb channels are held in the alpha channel of the other 3 normal maps.
It seems to work O.K, I get around 100fps with ~60k polys although I think when I convert to shader asm it will be a tad more optimized.
This mip mapping has really bugged me though, will try ur solution right now whilst I await the beta confirmation.
Thx again, much appreciated.
Justin