I have been learning how to create advanced materials last few weeks and recently been working with DU/DV maps for some fallback (DX8) materials.
I downloaded a tool from VDC but you need steam running to convert the normal maps to dudv maps.
I've written a small a program that converts any TGA file into a DUDV without the need for Steam. (With the help of ATI Radeon SDK)
It's not perfect but i get results good enough that i barely notice the different between a DUDV map created by hand in GIMP or Photoshop and my tool.
http://developer.valvesoftware.com/wiki/TGAtoDUDV
Download link is on the page with instructions how to use it.
I hope this helps some people and could be useful to developers who are creating DUDV maps who don't want steam running everytime they have to use the app.
Peace all and enjoy