I'm trying to make something simple, and I damned well know in Oblivion I used Blender to do this-- pretty much apply a in game asset (flame graphic) to another ingame asset (sword) so that, yup, you guessed it-- it's a sword that's on fire. I remember it being pretty damned easy (and given how godawful drunk I was most days back then, this makes it pretty damned easy).

I don't believe I have to fiddle with .nif's, since those are all linked to meshes and I'm not screwing with meshes but with the textures overlaid atop them. However, everything I've unpacked from the .bsa's is .dds and blender 2.49b does not like .dds.

So: what the heck am I doin' wrong?

(And, yes, I have an actual-factual reasoning for making a flaming sword-- what else way would a high order Dremora Lord use to instill fear in the uppity mortal who summoned her against her will than to use his pyrophobia against him? (She gives it to you, you wield it against her enemy (pyrophobic dark elf. Yes, he has resistance. He's also a suffer of PTSD connected to flames)).