I downloaded the 32 bit file, but the exe then asks me for the folder I want to place it in. There are no instructions anywhere for precisely where this plugin is supposed to go, and I have tried several places. My Photoshop still does not save or load DDS files.
You should be able to place the dds.8bi file in the following location.
Please make sure you have downloaded the correct version of the plugin, either the 32/64bit version
Drive:Adobe\Photoshop Elements 9\Plug-Ins\File Formats