I've re-textured the vanilla exquisite robe, but now I need an icon for it, and don't know how to generate one. I know they come in either TGA or dds format, which one is recommended, and why?

i normally just use tga for icons since i dont need mip maps for them . as for how to generate one . do you use gimp or photoshop. there are several tutorials out there on how to make an icon using gimp. which is how i leanred then i just applied the basic knowledge to photoshop.
here is just one of the tutorials that i found real quick.
http://cs.elderscrolls.com/constwiki/index.php/GIMP:_Creating_Inventory_Icons

As of right this second, I'll be using Gimp. Thank you.