Maybe you used non-mipmap DDS textures for internal skins? The mipmap checkbox only creates mipmaps for PCX, BMP, or TGA textures. DDS textures are expected to already contain mipmaps.

For the rendering it should not make any difference whether the mipmaps are created by MED, by the DDS paint program, or afterwards by bmap_to_mipmap. The latter has only the disadvantage of slower loading and more code.