They still haven't fixed JPG importing in TF2? Valve!
The JPG import feature is sufficiently lame that it would still be worthwhile to use VTFEdit even with it working.
Really, how hard would it be to make the import feature accept transparent PNGs and animated GIFs, and automatically resize them down to fit inside the filesize limit?
"I have not actually recommended many games, and I'll go on the record here saying my track record is probably best in the industry." - schild
I don't suppose anyone has a sequence pictures from Portal? I'm thinking a simple animation of a rotating portal would look good. (Since I'm somewhat lazy I figured I'd ask for starting material before photoshopping all this from scratch.)