I don't think that was the case since I can't find any official notes about POW2 requirements for mipmapping in D3D documentation but I also can't find any samples to upload that are showing non-POW2 mipmaps in action. I'll probably make one soon then. I've once hacked up mipmapping for GM through a proxy DLL so this shouldn't take a lot of time...
Chances are, DX is scaling them to a POW2 for you. Remember mips are 1/2 the original size, and you can't do that if they aren't POW2.
Having looked at the documentation and worked with both D3D8 and D3D9, I imagined moving from D3D8 to D3D9 being more like a few hours of find-replace work than a lot of effort. Am I missing something here?
Changing to DX9 wouldn't give very much as we currently don't allow shaders anyway. It would also take a lot of effort to change it all. I know this having already done it for the C++ runner.