The banners are fairly boring, esp the few that aren't tattered. I thought of a way to possibly make something that looks like a tapestry. If you took a screenshot of something, changed the resolution so it had a slightly pixilated look, it might look a little like a cross-stiched or embroidered cloth. If you applied that texture to a banner mesh it might look nice. Has anyone tried this?
It is a very simple process to retexture a banner in the ck, by using TextureSets. You can get rid of the "tatterd-ness" by editing the alpha layer (you can even change the shape of it by editing this). I've done it in my mod and it looks pretty good in-game
I have found in my Levelers Tower mod, with the paintings, you can use a full picture quality image, but apply a 'canvas' normal map texture, and it really looks good.