Hammer Problem: Orange Box:
-Tip taken from The Shrinker 2008-08-13

"Do you have very blurry low resolution textures in your Half-Life 2 Hammer: The Orange Box version? That comes from a severe default misconfiguration and is by default not your fault. Luckily, there is a solution.

1. Use GCFScape to open "Steam\SteamApps\base source engine 2.gcf" and locate bin\dxsupport.cfg
2. Extract that file to SourceSDK\bin\orangebox\bin\
3. edit the file and change the line
   "ConVar.mat_picmip" "2" to
   "ConVar.mat_picmip" "-1"

done."