http://cloud.steampowered.com/ugc/542907315073928234/F6F035065392C2F836EC9948A0B283FD07A02850/
Way worse then before the patch.
http://cloud.steampowered.com/ugc/542907315034444909/4A1CE9EDDBB41D379372616543E46968F42783EE/
In the gigantic post from Gstaff (http://www.gamesas.com/index.php?/topic/1238786-new-rage-pc-update/), it says:
If you do not experience a crash but you see texture corruption then you may be able to get the large Texture Cache to work by accepting the change and restarting the game. If you still experience texture corruption after restarting the game you will have to set the Texture Cache back to SMALL.
I originally took this to mean quit, and restart. I think that was wrong. It must mean start a new game from the beginning. (ie: watch the cinematic you can't skip for the 50th time. My only consolation is that that video is properly branded.)
So I finally decided to start a brand new game instead of loading an old save game and had success! My Radeon 5870 1Gb must not be enough to use the LARGE setting, so I had to set it back to SMALL, and restart the game again. Everything looks good.
The only problem I'm having now (and it's a big one) is that every time I save the game, RAGE freezes. Let that sink in.