So people don't jump on me about various things I have tried the following and in all cases the problem persists.
Ways I Have Ran The Game:
1. From the disk.
2. From the HDD.
3. From a USB.
Things I Have Tried With ALL The Different Ways I've Ran The Game:
1. Clearing everything, patch, Dawnguard, then putting everything back after clearing the system cache.
2. Clearing the system cache.
3. Clearing the game cache.
4. Installing the game and applying the patch and redownloading Dawnguard after deleting everything and clearing the system cache.
Things I Have Tried In Game To Try And Avoid Problem:
1. Go into third person then go into character menu.
2. Save all attire as favorite and un-equip it before going into character menu.
Apparently whatever the game does when it blurs the screen when you bring up the character menu affects alot of different equipable items and degrades the textures. Personally I got an idea but maybe its too simple to work. Instead of trying to iron out code that messes stuff up, why doesn't Bethesda simply make the character menu behave like all the other menus that don't cause problems. By that I mean remove the blurring zoom-out effect of the character menu, just have it come up like the start menu, no zooming, and maybe just for good measure no blurring.
I paid full price for this game and bought Dawnguard, I didn't get it used, I spent just over $85 and quite frankly this issues existence is unacceptable.
BTW, there is a "fix" but I use that term loosely. Basically you back out to the Xbox home then start the game again, clearing the game cache for good measure. Load up a save and the textures will be fine, that is until you open the character menu again, which means people like me who are werewolves with the Ring of Hircine are just out of luck, cause changing un-equips everything and even if you Favorited the ring and the power the power gets removed from Favorites when its un-equipped. Carrying too much and need to go through your items and drop some stuff, gotta start the game again after, leveled up and want to apply a perk, gotta start the game again after. Which all told, depending on whether playing from the disk or HDD or USB can take over 5 minutes. As Skyrim is an RPG the character menu that takes you to 3 screens you can't get to any other way, you are going to be using that menu alot, far too often to have to spend 5 minutes restarting your game to get it to look how it should all the time.
You could essentially avoid bringing up the character menu for inventory purposes by using containers to go through your inventory, but that still doesn't help you with skills and spells. BTW there is a way to keep the Ring of Hircine power from being unfavorited, after transforming back you have to equip the ring via inventory before opening the Favorites menu cause if you open it without the Ring equiped it removes the power from the list.
While unless you're constantly getting Spells the container inventory trick should help reduce how often you need to use the character menu by alot you will have to make sure you are always by a container or a body of some kind when you do things, though seeing as how there are plenty of things you can open that shouldn't be a problem, just have to train yourself not to press B. I've just started training and I've started by changing B to Wait. But again, YOU SHOULDN'T HAVE TO.
Something I didn't consider with the Ring of Hircine, if you're like me and you use the werewolf form for extended land travel, if you don't keep your duration up and transform back while out in the middle of nowhere you better hope there is something you can punch to death cause otherwise you'll have to go through the character screen to equip the power, that or fast travel somewhere where there is a container then go back to where you were. And a note for vampire unless its somehow different for you and you get your previously Favorited powers back after not feeding you are pretty much screwed.