I know I can just shoehorn an entry into the Portaits.wdt database, but it would be nice (due to presumed conventions) if the game would at least have a dedicated line or scope of ID's that we could use. Bonus points if the game came with a utility to convert any picture into a 256x256 DDS.

You can find some tutorials for modding here:
http://www.moddb.com/games/starpoint-gemini-warlords/tutorials

But no, we don't have a utility for DDS, it's done in Photoshop. There are explanations in tutorials. I hope this will help.

I downloaded the archive and extracted it into the mod folder, but the portraits are not available in the campaign?

Hmm, portraits should be available in Campaign after you finish prologue. :-/ Then you get a character creation screen where you can choose your portrait, gender, name, class...