Ok, I hit a snag and need a bit of help. My problem are the textures, specifically it looks like something's off with the normal map because as the ship turns about the light/shadow areas do not transit smoothly across its surface but jump abruptly from polygon to polygon. In addition, the diffuse texture seems "washed out".

I thought at first its a model problem, since the converter reports "invalid vertex" errors when converting from dotXSI format, but I have tested this by importing a low-poly sphere (without errors) and got the same problems.

My diffuse and data textures are without error. I use Photoshop, I have created proper alpha channels and set them the same as the original textures have. I'm using NVidia's .dds exporter plugin, set to DTX5 Interpolated Alpha mode for diffuse and data textures and DTX5 NM format for normal maps.

For models I use XSI, straight up mesh export using dotXSI.

What am I doing wrong? Anyone has any idea or advice?