What card are you using?
Looking at the ground at an angle could be ugly due to fubared aniso filtering. Face on to a tree wouldn't need AF to look good.
Or not :-)
WRT 2yr old game, gearbox stated that they rewrote all of the shaders. Could be they just did a bad job. I dunno if when you run the PS1.1 code you get the original gf3 PS or if they were rewritten, too. Using -use11 should scream since that will be a load similar to the xbox.
3G Athlon + 9800P256 should be >> 700M p3 + gf3.