For what it is worth:
Installing and running from HD textures are slightly better than Morrowind - with a far larger draw distance.
Running from the disc they are as found on the videos from Beth showing the 30 min demo. Possibly one of the best looking games on the xbox and certainly best looking open world game.
The issues are purely caused by a combination of hardware and software.
As this is not found by all xbox users it should be possible to patch. But yes, it is irritating that it was not found during beta testing. One wonders if it is caused by day one patch? Has anyone with problems tried running it WITHOUT the first patch?
Edit: This is running on 6 month old:
Xbox slim
250 gig
110 gig free
Game saves to 2 gig usb drive
Okay people need to start reading posts about this from the people playing the game instead of the Bethesda sticky or the plethora of news sites who are covering this issue improperly. Playing from the disk doesn't fix anything for most users. Neither does installing to a flash drive. I've tried every combination of possible ways of playing this game so have MANY others and the issue persists. Please people stop making this out to be, "Just a little hard drive bug". It's not. Also this attitude isn't helping anyone, Bethesda needs to see how bad this really is instead of thinking that it's just an installation issue. It's bad enough every single news site already reported this and made it seem like playing from the disk solves everything. Start discussing this properly. Installing to a flash drive has helped SOME users, but most of us have seen little difference. There's even a poll on the this forum and it shows that in total over 75% of users are having this problem. It even goes into further depth and asks how the game is being played; HDD, Flash Drive, or disk, etc.
Please, stop making this seem like a "minor issue, easily solved by reading from the disk."