Is it just me or do the ships looks slightly more detailed with compressed textures on? Parts of the cockpit look slightly sharper too.

Shouldn't that make them look worse? Is it just in my head?

Which yields superior image quality? Compressed Textures on or off?

any clarification?

I'm not sure. The only thing I know for sure is that enforcing DX8 as render mode (in the flux.ini) makes everything look a bit better, from better LOD to lighting. Just remember to make a backup of the INI file.

Also, maybe you can post screenshots for comparison?

In the flux.ini you'll find this entry:

[icOptions]
directx8_available = 0
use_directx8 = 0

Now change both entries to 1:

directx8_available = 1
use_directx8 = 1

You will definitely notice better LOD and, if I'm not completely mistaken, also better lighting. Try it out and make a backup of the flux.ini first.

As far as I'm aware those DirectX8 options do nothing, because the DX8 patch was never released. It's not impossible they may be wired up to something, but it's definitely not the DX8 renderer, because that requires a special DLL that's part of the unreleased DX8 patch.

ive tried enabling it, no difference

i think it's a placebo effect