About (From Valve developer community):

• VTFEdit is a GUI frontend for the functions contained within VTFLib, an LGPL open source programming library. VTFEdit is a successor to VTFTool and is written by Neil "Jed" Jedrzejewski and Ryan "Nemesis" Gregg.
• VTFEdit itself was written solely by Ryan and is a .NET based GUI tool for the creation and conversion of VTF and VMT files. It is a powerful tool allowing files of various formats to be converted to/from VTF format in all of the Source texture formats.
• VTFEdit produces MIP maps and DXTn compressed images using nVidia's nvDXTlib library, offering a wide range of formats and filters.
• Other features include the ability to create normal maps from grey scale images, various sharpening filters for MIP Map generation, access to all VTF header flags, a simple tree based VMT creation system with GCF access, a WAD conversion tool, a batch conversion tool and a VMT creation wizard.