I chatted with a friend of mine who is an IP lawyer regarding s3tc. 
Here was his response:

"I looked at the claims, and they all seem to be
related to processing, as opposed to data structures
or protocol, so it seems as long as the driver isn't
doing any processing you should be fine.  Since you
understand what you're doing better than I, I would
suggests reading through the claims and asking
yourself if your driver does any of that.  If so, we
should talk more, but if not you'll be ok.  You only
infringe the patent if you're doing what's recited in
the claims. "

He also suggested we contact the law firm managing the patent if we had
any questions since they are more likely to respond than S3:

SKJERVEN, MORRILL, MACPHERSON, FRANKLIN & FRIEL  
City:  SAN JOSE  
State:  CA  
Zip:  95110  
Phone:  (408) 283-1222 

for those interested, the relevant patents are: 5,956,431 and
6,658,146.

Alex




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