SimPE + Nvidia DDS Tools
With the DDS Tools, you use Build DXT instead. You do this by first selecting your texture in the resource list and then right-click on it in the Plugin View and choose Build DXT. Then you click "open image" and navigate to your texture as usual. Hit "build", wait for SimPE to do its thing, and then hit "commit" and save once the window has disappeared. When you check out your new texture in game, you'll see that it's no longer blurry.
One thing you'll want to pay attention to with Build DXT, is the format. DXT1 is used for solid textures; if you want your texture to be transparent, you'll have to use DXT3 (and also change the AlphaBlendMode in the TXMT to "blend"). DXT1 is compressed harder than DXT3, though, so personally, I prefer to use DXT3 for non-transparent textures as well.
On the money thing - as long as there are no alphas. Like NixNivis said - alphas = DXT3 or above.
PS - I think NixNivis deserves the best answer (curses.......)
* leefish ponders making a helpers scoretable.... once we have twenty threads I will