But if we don't make a deal out of it, they will NEVER fix it. Some people are bothered by an ugly game that has no reason for being ugly.
It's not ugly, trust me, even with the texture problem. But it IS annoying when some things look worse than in Oblivion when you know they are supposed to look better.
I'm sure a fix will come very soon and for now, playing off the disc is fine.
PS: about the whole inventory menu and re-equipping thing... I don't know if that has much to do with it. It doesn't seem that way to me, anyway. And you can't equip wall carvings or things like that. My advice is, if you've experienced the problem when playing from the HDD, just delete the game. At first it will still have the blurry textures, but they will improve.