U need to let game get fully cached when not installed to fix texture issue (DO NOT CLEAN CACHE).
They are working on install problem where even when it is fully cached textures fail to load.

As people race to their 360 to see if this works I will patiently wait and see their verdict while I watch Boardwalk Empire. Best of luck folks and I have my fingers crossed that once the system stores some info in the cache this will all be resolved.

They say they have verified that the issue does not occur when playing from disc but that's not the case. When playing from disc, I still had the issue occuring on my characters hands. No textures would appear on my characters hands regardless of whether it was playing from disc or installed to the HDD.

It may be the case for them. They've obviously been playing it, so I assume the game is completely cached on their systems. For someone that hasnt played it, it had to load all of those textures and cache them, which may be causing the issue. From the sounds of his post, if you keep playing, the game will eventually cache everything it needs and the problems will disappear eventually.

The game looks like crap when playing from the disc for me, does that mean the game just looks like crap?

i played the game for a few hours on disc, idk 3 or 4 i think it was ....then i installed it to the hdd....and i can say that the texture issue everyone has been having...i still got it.