Majority of my art files I create I save as png and then use
BLP2PNG to convert it to blp.
BLP2PNG will convert the file based on the original type:
* BLP are converted to PNG
* BMP are converted to PNG
* TGA are converted to PNG
* PNG are converted to BLP
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You drag your file directly onto the exe/program and as long as it meets the proper graphical dimensions it will convert it.