Figured I'd post some of the things I've learned going through the game's files.
First: Audio is XACT files, which means it's very, very hard to swap out audio files. The XWB files (WaveBank) actually store the sound files, while the XSB files (SoundBank) store the sound data (Pitch, Volume, etc.). Editing the files could very possibly mess up the game's audio.
It
is possible to swap out files, but to do that you would need to rebuild the WaveBank. Doing so would require putting all of the sounds that are currently in the WaveBank
back into the rebuilt one (in the same order!) and swapping out the ones you want to change. Here's what makes that hard, though (if it didn't sound hard already!), you have to keep the filenames the same. I'm not sure if you can pull filenames out of the files or not, or if they'll have a hashed name if you extract them, but audio in the game should be referenced by name. If the names don't match up, bad things happen.
Secondly: Texture quality. Generally speaking, the textures aren't awful (wait, wait, let me explain myself!). There are some horrendously low-res textures in there, but (especially for character textures) the main reason textures look so blocky is the normal maps. All of the normal map textures I've found are 1/2 or 1/4 the size of the texture they're representing, which leads to extremely blocky-looking textures when lit (a good example is George's leather jacket).
I've done some preliminary tests on increasing the normal map resolutions and it does seem to look better. Pretty much you just take the full-size texture and generate a normal map from that using the
NVIDIA Texture Tools. Then save the normal map file as a .dds file with mip-maps. Keep the name DPFix gives it when it gets dumped, and stick it in the tex_override folder and you're good to go.
Last, but not least, I wanted to say that Windows 98 compatibility didn't work for me (controller didn't work). What
did work for me was setting it to Windows XP Service Pack 2 compatibility.