I’m suprised nobody seems to know what you’re talking about. I, too, think that Blender GE horribly destroys textures, and I have no idea what’s wrong. Disabling MipMaps doesn’t help (take a look, drag the main menu (file, etc) down just like any other blender window to see Blender options. Then hit “System & OpenGL” and uncheck mipmaps. Doesn’t do much here, though.
Text is basically doomed to look awful. I’ve never seen it look “normal” as you’d expect, it’s like the rasterizer compresses the texture to the lowest quality jpeg.
Does ANYONE have experience on making this ok? It’s not noticable on basic textures that much (like concrete) but when it comes to text or any finely-detailed texture it becomes glaringly awful.