First, the UI issue. The preferences menu as it is seen on the Public Test Server for version 1.1 of the game is correct - there are only supposed to be two texture choices, 'Low' and 'High'. This replaces the original three-choice preference of Low/Medium/High because in reality, there was never supposed to be a 'Medium' choice - that was a bug.
MEANING!!!! High resolution textures were never meant to be in the game.