I'm using QTP3 redimized, Ambient Dungeons and OBGE but the textures look horrible and the game is gritty looking.

Gritty dungeon wall:
http://s249.photobucket.com/albums/gg201/evok99/Oblivion/?action=view¤t=ScreenShot0.jpg

Ugly Dungeon Textures:
http://s249.photobucket.com/albums/gg201/evok99/Oblivion/?action=view¤t=ScreenShot1.jpg


Very plain looking:
http://s249.photobucket.com/albums/gg201/evok99/Oblivion/?action=view¤t=ScreenShot3.jpg

Ugly Wood:
http://s249.photobucket.com/albums/gg201/evok99/Oblivion/?action=view¤t=ScreenShot4.jpg


So, am I being daft and this is how QTP3 is supposed to look or is it as ugly as I think?

Looks normal to me. Don't take my word for it, though; I'm nowhere near as experienced as most of these guys.

Make sure to click on the picture so you can see it full-sized. It looks better when it's shrunk up like that.

As far as I'm aware that's how QTP3 Redimized is supposed to look. It's exactly how my game looked when trying out those textures anyways. I wouldn't say it looks ugly however. I think it's a definite improvement over vanilla textures. I believe that gritty look is actually intended; the low resolution of textures in vanilla oblivion stretched them out and eradicated these minor, gritty details which higher resolution textures actually make possible. If you want things to be smooth I really can't recommend using high rez textures as it'd just be a performance hog with very little benefit otherwise.

Ambient dungeons comes with a file, I can't recall the name, but there's a "fixed" version on TESNexus, and the original version on Timeslip's website. The "fixed" version gave me weirdly pixelated walls while the original did not. Try checking to see if that's the problem.

Someone remember the name for me please.

Also check your video card settings and make sure you have Anisotropic Filtering set to high quality levels for Oblivion.

Thank you, I will check that out

One of the versions of OBGE gave me a "gritty" look to my game. You can try using OBGEv2 and see if that helps, but that version gave me a bug where I couldn't see my character underwater. I ended up just not using OBGE at all.

To me, it looks like you have QTP textures with old normals which don't match up. You probably downloaded something else that replaced a lot of the game's normal maps after installing QTP.
Try reinstalling QTP and see if that helps.

Either way, it definitely looks to me like something has botched the normal maps, so no matter what reinstalling QTP should replace the botched ones.