Could you post a screen shot just for my curiosity's sake? I have not seen any such texture issues on anything and I am using DX10. I have an older video card too, an ATI Radeon HD 4350. My guess would be that this may be a graphics driver issue or as others have mentioned, a DX issue, or both.
Have you tried updating your DirectX as well as updated to the latest drivers for your video card or mayhap even rolling back to a previously working driver?
Also, this is definitely a bug, so moving it here isn't a bad thing. This is where the devs look for non-ticket issued bug reports, even if they do not respond or fix them in a timely manner.