It depends on your graphics card, but I'd be surprised if any graphics card supports a DXT format render target.
You can find out what render target formats the graphics card supports by looking at the caps viewer that comes with the SDK, or with IDirect3D9::CheckDeviceFormat:
D3DFORMAT adapterFormat = D3DFMT_X8R8G8B8; // Display mode format
D3DFORMAT rtFormat = D3DFMT_DXT1; // Render target format
if(FAILED(pD3D->CheckDeviceFormat(D3DADAPTER_DEFAULT, D3DDEVTYPE_HAL, adapterFormat, D3DUSAGE_RENDERTARGET,
D3DRTYPE_SURFACE, rtFormat))
{
// Format not supported
}
You can't render to DXT1 (or any other block compressed format) on any GPU. In DX10 and DX11 you can do the compression manually in a shader and then have the device treat it as block-compressed format when sampling, but that's about it.
