I am not real savvy when it comes to video card settings, so if anyone has any advice it would be very welcomed, below is a screenshot of my problem, my graphics look like crap, I am hoping it might just be a setting.
My computer specs.
AMD Athlon XP 2800+
2.08 GHz, 1.0 GB ram
ATI x1650 Radeon
512 MB DDR 2
with the latest drivers.
I see. I think you should be ok with everything set to max on that video card. (I tend to have everything unticked but [No VBO]).
Are you familiar with the ATI control panel? There are many driver options providing performance/quality trade off. The two most obvious are antialiasing (AA) (aliasing results in the jagged step effect you see on diagonals), and anisotropic filtering (AF).