I am trying to mod my game, but, I am encountering the following problems:

I cannot see the default .dll files, meaning I can't use .dll textures, if someone could tell me how to make them visible, that would be great.

Also, how do I convert image files, i.e. .gif, .jpg etc into a .dll file?

If you could help me, I'd be grateful.

Also, I have FOMM, and I am not asking how to extract .bsa files, I know how to do that, but I can't find any .bsa, .dll or .dds files to extract! They are all non-visible.

You mean .dds files, not .ddl. That's a completely different file format that has nothing to do with textures, it's a programming file. As for how you work with them, you'd have to mention what graphics program you're using. All but one, that I know of, requires a plugin in order to work with them. The only one that doesn't is Paint.net, at least that I'm aware of. It's a free program so you might want to consider trying that one out. If you just want to be able to see them in Windows Explorer, or some other file utility, the viewer I like to use is available here:

http://www.amnoid.de/ddsview/

It's only a viewer though, and has limited editing capabilities. You'd need some sort of graphics program in order to manipulate them.