No idea why your getting the error but why not just simply create a new MAT file?

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I have tried deleting the old .mat files and creating new .mat files, overwriting the old ones, even tried using the .mat exporter for ms3d. Is there some kind of rule as to .tga file size or something?

all textures including tgas must be 64X64, 128X128, 256X256 etc - make sure to select 24 bit uncompressed for your targa format. also, my 2 cents: don't use targas - they suck-suck-suck. use DDS, and the headaches are reduced greatly (unless you're making transparencies, which is harder with DDS's not-so-well supported format)

failed to get start location sounds like an openSP error, unrelated to the texture problem other than it's the last thing the program can say before it crashes completely due to a bad format texture.

MIP0-1-2-3 etc is for TGAs
MIPS is for DDSs

use the mat exporter - its much simpler

I will try the .dds approach and see if that works any better.

So what would be the solution for the Opensp error? It seems the more things that I try the less it works.

Simply forget about it, it's an inherant error that appears in SP & OpenSP, I made a save just after the story finished and get that error with it as well as with any OpenSP mod. Freelancer always runs through the story part of the Content.dll, and when it realizes that the story is finished it throws up that error every time.

**shuffles off with a new headache**