[Cairenn]

There are only three things that the targa format requires to work properly in games (and a lot of games these days don't even have the first one any more):

1. The dimensions need to be a power of 2 (2, 4, 8, 16, 32, 64, 128, 256, 512, 1024);
2. The max dimensions must be 1024x1024. If you try to make either dimension bigger, it won't work; and
3. Your graphic must be saved as 32bit (24 for rgb {8 for each channel - red green blue} and another 8 for the alpha {transparency} channel).

.png format will also work in WoW as well as .blp2 (as you already know). A lot of people tend to prefer .png over .tga because they save 'smaller'.