The variety in DDS formats and compressions corresponds (in part) to the type of data being stored. It's due to this variation that textures for Mass Effect get very complicated, very quickly. DDS files are highly versatile, supporting compressed and uncompressed texture data that uses a variety of formats and algorithms. This format was introduced with DirectX 7.0 and has become the industry standard for use in DirexctX/Direct3D gaming applications.
As discussed in An Intro to Mass Effect Mods, all three installments of the Mass Effect trilogy use Microsoft's Direct Draw Surface(DDS) format for textures.
