I recommend using DDS Converter 2 , a free and easy to use tool which can convert most commonly used image formats to .dds, using either the S3 or nVidia algorithms. Besides, its a lot faster than the nVidia plugin for Photoshop, especially if you work with textures bigger than 1024x1024. And yeah, it can work in batches.
When converting, simply select the nVidia algorithm and DXT5 for all your textures, including the normal maps. I tested it (in fact I use it myself) and it works fine with Sins.