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For some reason the game sets my texture budget to 64mb which makes everything look really bad. I have a 4GB card and although that´s low for this game it shouldn´t look so bad. I went into the settings and manually changed the default budget of 64 to a higher value (see below) and that resolved the issue. See images for examples.
The settings file is in your "Documents\My Games\AFOP" folder called "graphics settings.cfg". I´ve included a download which includes an edited file and screenshot just for reference and in case you want to endorse this fix so others will find it more easily.
You can try 1024, 2048, 4096, the game seems to work it´s own budget out if it is set too high. Setting it to 8192 on my 4096MB card didn´t cause any issues, the game ran fine but reported higher vram usage as expected and the settings reverted to 5120. 512 was enough to get the textures out of the potato bin, but higher settings made everything look better but I ended up settling on 1024 for my setup.
I deleted the "graphics settings.cfg" so that the game would regenerate a new file and it again set the value back to 64 and the game looked awful again. If you are affected by this bug then give this edit a try. This setting change works on the current version (1.02) but if in future versions Massive don´t fix this, then most likely this setting will work the same.
If this fix becomes obsolete in a future patch I will update this description.