palletized textures was an added selection because certain video cards (non-nVidia) displayed gunsights and player icons incorrectly. (black box)
mip mapping.. ok I am not 100% sure on this so no quoting me +) I think mipmapping affects how sharp textures are based on their distance from the player. The closer to the player the sharper they are. This i think helps reduce amount of texture memory required....
SKurj