The key to creating / converting remote sensing imagery (e.g. LandSat, NAIP) for ArcPad is broken into two parts.
Part 1: Use ArcMap.
This is because ArcMap understands satellite imagery and can do the statistical band stretching needed to render your images properly. Non-ArcMap products, if they're not targetting the remote sensing field, are not likely going to handle the images the same way; they generally ignore the statistics and produce a poorer image, or even, a black image.
Part 2: Data Export with Use Renderer and Force RGB.
By asking ArcMap to render your 16-bit images into 8-bit RGB images, ArcMap will band do the statistical band stretch for you and produce an image that any non-ArcMap application can open because the hard work was done for you. The result is great for ArcPad because the new image is automatically half the size (because 8-bits uses half the space compared to 16-bit data) of the original without compression which is great news for mobile (i.e. more speed, less memory). In additional, you can choose additional compression, but I wouldn't given that storage memory is cheap these days.
So, what are the steps you need to do?
1. Load your .img data in ArcMap
2. Right click on your .img file in the ArcMap table of contents and select Data > Export Data
3. Ensure Use Renderer is checked
4. Ensure Force RGB is checked
5. Choose any output Format (I prefer TIFF)
6. Choose any Compression Type (I prefer NONE)
7. Click Save
8. Verify the results in ArcPad
