Hi
I've had issues with textures when using DX7 like some other people; did a little digging around and it seems the offender is the texture flag "4" set on those textures that don't work correctly on DX7. Setting flags to 0 or AA000 (for 1024² textures) solves the problem.
A lot of these texture flags seem to be set incorrectly, lots of wrong sizes. Probably doesn't matter with newer DX.
Some flags openbrf doesn't know are explained here: http://forums.taleworlds.com/index.php/topic,174253.msg4189579.html#msg4189579
Doesn't say what 4 (ie flag 2) means, but according to the stats there it's save to say it should only be set for normals/specs and not regular textures.
It seems those flags are generally ignored when using pixel shaders/dx9 so it only concerns those of us stuck with fossils anyway.