I though I had fixed it by lowering the texture size but no luck
http://www.youtube.com/watch?v=SZqY80QL-P0&fmt=22
Here is a little video of me just driving and shooting.. Note the road texture, wheel texture and explosion texture. Running at 1920x1200. I can post a screen of my DGVoodoo settings if needed.

I'm having the same problem. It seems to start happening when I damage an enemy car for the first time, and the car's "damaged" textures load up.
I'm using Windows XP, running through hip63's launcher with DGVoodoo support in glide mode.

I have hade the same problem. I've gotten my textures to revert back to normal by changing an option in game, like turning on and off the external dashboard view (in the F2 viewing mode)