I think you are talking about the same but with different words.
Of course, GPU can't use compressed texture. It need to know color of each pixel with coords X,Y. The main question is when texture will be decompressed? While loading or during pixel colourization? In other words, does it stay compressed or decompressed in video-memory?
I didn't read any special articles, but I believe that DDS-textures stay compressed in video-memory and will be decompressed on the fly when needed (may be partially).