Right, mipmaps are LOD image maps that are used based on the players distance from a given texture. The further away the player is, the lower the LOD (the smaller the detail is needed) On the topic of alphas. The posters have an explicit alpha channel. You'll see it when you view the channels, labeled as alpha. It'll be white where the texture will show and black where it wont. Since the posters have torn edges and holes. You can change that just by painting on the alpha layer with black and white - black for see-through, white for opaque - and you can feather it of course for a smoother transition between the two (but the quality of that transition will be based primarily on your export settings and secondarily, on the users settings - so high quality setting will notice a much smoother/better transition between what's in alpha and what is not). When you save, to get a smooth transition, save as DXT3 ARGB 8bpp | explicit alpha. This will retain the feather between alpha and opaque (if there is one) and use the alpha channel explicitly - as it exactly is. Saving as 1bit alpha will create the alpha based on the 1bit pixel point on the alpha channel. It will either be alpha or it wont be. Which will jag the edges of any transition between 100% alpha and 0% alpha. Keeping in mind, of course, that the explicit version will be slightly bigger in file size but for posters, it's negligible.