This is incorrect. Mip maps are necessary for almost every texture. Removing mipmaps from normal maps would have a horrible effect on the clarity of the image. Not using mipmaps would result in a "shimmering" effect as seen on the image here: [img][src="http://www.shinvision.com/wp-content/uploads/2009/06/mipmapping-egz.png"]http://www.shinvisio...mapping-egz.png[/url][/img]
If mipmaps are removed, the pixels on the left example would be constantly moving. This would be very noticeable on normal maps; from what I've seen normal maps included in most texture packs are done rather badly and are incredibly noisy.
I have posted a link to this thread on Polycount forums (it's a forum dedicated to video game art that is populated with game industry professionals), hopefully some of them will contribute to this thread. I appreciate the idea of making texture packs because I do believe that they suffer from being low resolution, but at the same time a vast majority of texture packs could look a lot better and could be done more efficiently.
Some random thoughts:
Unfortunately, creating texture replacers for objects that had their normal maps baked from highpoly models is pretty much pointless. Their diffuse textures can be tweaked, but modyfing their normal maps in Photoshop will often produce technically incorrect results. Objects like that rely on normal maps NOT to add surface detail, but to define the shading of a lowpoly object and bring it closer to its highpoly version. Upscaling normal maps and overlaying noisy detail on top of it can make it appear slightly sharper, but in most cases it will produce worse results than rendering the normal map at a higher resolution. Here's a massive article about normal mapping in current generation video games: http://wiki.polycount.com/NormalMapThe article also has links to tutorials that deal with the subject in more detail.
I will try to contribute to this thread every now and then. Compared to some of my peers, I may not have a lot of professional games industry, but looking at texture packs posted here I often spot plenty of simple mistakes that could be fixed pretty easily and elevate the quality of textures to a higher level.
Edit:
Here's a link that discusses DXT formats. http://wiki.polycount.com/DXT
There should be no difference in the colour reproduction between DXT1 and DXT5. The only major difference between the two is that the latter supports 8-bit alpha, at the cost of being twice the size of a DXT1 texture.