i did a quick check on the textures. as far as i can tell only the logo is missing transparency. plants, space debris and glass have a working alpha channel.
as for the blinking lights, that seems to be model related. after removing your mod i got the old textures, and the old lights were blinking in black squares too.
wikipedia has some interesting articles about dds
png is the only lossless widespread picture compression i know. but when packing multiple files with similar content, your tools of choice should be 7zip or winrar, due to solid block compression.