Texture Conversion Utility

Use Window: Texture Utility menu item to create sky boxes and signed textures for pattern maps. 

To start open and choose an image using Texture: Open menu
Choose a format from Tex File Format menu
Use Texture: Convert to save to file, a *.vmt file is created for use.

Signed Texture Formats
Signed textures contain values when sampled in range of -1 - 1, these are used for pattern maps and do not contain ARGB colors.  Formats are referred to as two channel UV. 
U8 V8 Signed
Conversion does not interpret image values and copies RG channel values into UV channels.

U8 V8 Signed Bias
Converts to signed format by biasing RG channel values by 0.5 and factoring to range of -1 - 1.  RG channel values are interpreted to be in range of 0 - 1 and are converted to signed format using UV = 2(RG - 0.5).

Sky Box Texture

Choose Cube Map: Create Cube Map menu item
Select Tex File Format: A8 R8 G8 B8 menu option
Use Texture: Open menu to choose a texture for each side of the cube map, there are 6 sides.
Specify cube map side texture goes into from the Cube Map menu

Example sky box setup