DDS is a direct draw format. Its highly compressed and supports things like mipmaps and alpha channels. Its basically the newest and best form for storing 2d graphics for applications. You can DL a DDS plugin for Photoshop and Paint Shop Pro at nvidia.com

Anyway the pics are real yes. Its no big deal but the two pics of the frogloks are in the mugshots_male.dds and mughots_female.dds in the Demo/Images folder of the Character Creation INSTALL not the disc you install it from. So its /Program Files/Sony/EverQuest 2/DemoCreateUI/Demo/Images/

Theyre blacked out in the game cause the race is locked its just an overlay. The actual racial pics have to exist for the final project and since theyre there they must be finished enough for that.