Thank you for that tip! This solved the blurry textures for me :)

Also worked for me. It fixed the pixelated character portraits too.
Strangely this problem doesn't seem to affect the demo version, even with 1:1 settings.

Unrelated and this has been answered but I was looking at the ini file to see if there was a fix there without the use of DgVoodoo 2 for DX. Doesn't seem to be but what i did find out was the game runs pretty nice at 60fps instead of the default 30fps, you can also increase draw distance.

Go to where the game is installed, locate config.ini and change the values
max_frame_rate=60
draw_distance=33 (50 and up crashes the game)