Its been a while since I've played this but I am sure it looked a bit better than it does for me..or was blinded by nostalgia.

Is using 3dFX the best possible graphics settings I can use? The draw distance seems a bit low to me for some reason.

The draw distance is like that no matter what renderer you used,And increasing it through the txt files to see everything make the game unstable to the point where you can't even get into a race.I'm sure Toshita in this forum and the official carmageddon forums knows the best way possible to increase the draw distance while still keeping the game stable as it is.