How do you build a game? If you use OpenGL directly, and if you are happy with the compression it offers, PVR is a terrific format for much smaller and really fast images.
PVRTC on Wikipedia
As keegan3d said, Xcode re-compresses PNG images using PNGCrush. It reverses the byte order and succeeds alpha. This article explains what happens: iPhone "Optimized" PNG
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