Nem has released a plugin for photoshop that can open/save .vtf format files. Very nice of him, if you ask me. The docs say that its limited because it doesn't support multi-frame vtf's, but I don't think that will be a major concern for most of us.
More details and download here.
My trial version of ps is almost done too. 
Yeah I just wish that it included a VMT creator along with it, It would be nice to specify at least "vertexlitgeneric" and have it create something for you to work from. Short of that, I love just saving my images as if I were saving them as a JPEG. Then again this is the only program I have ever used for VTF creation, so the other routes may be great too.
Let it be said. Valve is not responsible for the community that exists around their games. The community is responsible for the community around their games. Hopefully Unreal 3 looks like it should finally actually be designed to be used by artists not Unix Programmers.
i've never seen much point in some of the texture creation stuff thats available, but this makes vtf a supported format in PS.
Really because I never got the impression they tried to make the process any simpler. The only thing they improved was autoconfiguring Hammer, which used to take about 10 minutes. Other than that, I've encountered no effort on Valve's behalf to make their engine easy to develop for.
I like to call it Carmack Syndrome. It's software by engineers for engineers.
I'm also quite suprised that Valve doesn't have an official conduit to the community with feature request and SDK feedback... but that's for another topic.
