What limitations has it got? I used it last time a long ago, so I don't recall its limitations.
The best IMO (at least for my needs) is DxTex, but not the one included with Orbiter, but the newer version, that is included for example with DirectX 9c SDK (I don't know if it's included in DX10/11 SDKs).
I have DDS plug-in for GIMP too, and I use it sometimes, but I usually make final textures with DxTex.