My computer is a Fujitsu-Siemens Amilo 1554 laptop, with a Mobility Radeon X1900. My drivers are forced Ati Catalyst drivers installed with the help of ModTool, althought the problem was present earlier as well with the stock Fujitsu-Siemens drivers.
 
In many games when I try to increase the Texture Detail, say from low to high, there is absolutely no change in look or performance. Some examples are Half-Life 2 Ep. 2 and Mass Effect. The textures look low-quality and blurry so I'm guessing they're stuck in the "Low"-mode.
 
In other games, especially some older ones, the higher quality textures do load and there is a visible change when fiddling with the graphics options.  
 
Any ideas?

make sure the games run at your native res first. then set the graphics options to medium-high textures.

I wouldn't recommend using non-ati drivers. use the ones provided by ur laptop manufactuer. sucks ati doesnt update drivers to consumers but passes them to manufacturers who either give them to u or dont. usually they change them a bit to work correctly with ur laptop (think power consumption, features, etc). I cant tell if ati stopped making drivers for x300 64mb mobility radeon on my old laptop or whether dell is being an a$$ and not letting me updater my drivers since 2005 so i can buy their newer laptops. Anyways, I would love to max out WC3 at 1280x800 which i cant with these crappy drivers and still get 30fps+ constant, mind you this game is so old, and doesn't support AA or AF unless you force it.

Go into the advanced settings in driver, make sure it allows program to set textures, and not forcing a global setting.

If you want to game buy a gaming Desktop, or a Xbox/PS3.

Except that his laptop has more power than the PS3, and about as much as the X360, so that's not a solution in anyway. It's like saying the answer is to simply turn down the texture quality and live with it, which is what the console experience would be similar to without having the benefit of AF in most games.

 
Are you on Vista or XP?
 
If you're on Vista the mod  tool is required, but on XP just use the latest mobile catalysts;
http://ati.amd.com/online/mobilecatalyst/
 
Be sure to wipe out the old ones first, and also be sure your DirectX installation is up to do after you install the drivers. Other than those two issues I don't know why it would be limiting you like that.  
 
Also, as PCGamer said, be sure you're running at native resolution or else interpolation will blur all the textures anyways.

There was a setting in Ati Control Center, something like Mipmap level detail which I changed from "Performance" to "Quality", and suddenly all the textures in games look much crispier. But you can't toggle it to "Use Application Settings" like others.. but anyway I'm happy for now.
 
Thanks for the ideas/help!