Small tutorial to convert texture to DXT1a (for example the one from SSELODGen):

1. Download paint.net from here : http://www.getpaint.net/index.html
It's free, easy to use, provide great quality compression and contains all the stuff you need to do it.

2. install it like any other soft (obviously...).

3. Generate Lods with SSELODGen (not needed if you already did it)

4. Locate your diffuse texture:
There are located in:
<skyrim directory>/data/textures/terrain/<world>/objects/<world>ObjectsLOD.dds

<world> is the name of the 14 vanilla default worlds (more if you have mods adding one).
It can be, for example, "Tamriel" in this case the texture path is:

<skyrim directory>/data/textures/terrain/tamriel/objects/TamrielObjectsLOD.dds

Do not modify the normalmap (<world>ObjectsLOD_n.dds) unless you know what you do

5. Once you have located the diffuse open it with paint.net
(right click, open with, paint.net)

6. click "save" or CTRL+S or waterer you want to save it (without modifying it or anything).

7. A dialogue box will open and let you specify how you want the texture to be saved:
In the settings (top-left) choose:
- DXT1 (opaque*/Alpha 1bit)
- Compression type : Iterative (the slowest/QH) => for best quality
- Check generate MIPMAP, not sure about which option is the better for this (if you know more i'm interested ). I personally use super-sampling*.
- Click OK, and wait

8. Done

The size of the diffuse should have been divided by two (for tamriel from something around 80MB you should have something around 40MB).

9. Repeate for each world. Note that only Tamriel and Solstheim are really important, maybe falmervalley too.
For the other the atlas is much smaller so there is not a big benefit for doing this.

10. You "may" be interested to ding this to tree atlas too, but the quality loss may be more visible.