I'm a member of the OldUnreal forum.
Some time ago, they've started a project that is still going on: Retextureing Unreal, Return to Na Pali and Unreal Tournament.
This project takes advantage of and relies on the ability of Unreal Engine 1's S3 Texture Compression (S3TC) and soon a retexturing project will start on UT2003, Unreal II: The Awakening and UT2004, and perhaps on UT3 as well, using DXTC, which is pretty much the same as S3TC.
The idea seems nice to me.
If anyone in here knows to make textures well, then I'd be glad if he/she/they will be able to make the textures.
The textures should be remade from scratch, for that is about the only way that the desired quality can be achived (the High-Res textures for all Unreal games were made that way).
There are also some specific renderers required to view them. These are:
*An enhanced OpenGL renderer
*A Direct3D 9 renderer
These are both included in Unreal version 227.
Anyone interested in helping, reply in here.

It is also recomended to have a high-res camera, but the resulting texture needs to be modified - probably until it's unrecognizable in some cases (to see proof, read about the making of Unreal I).
Take photos of several surfaces, and try to use some tricks where seeming necassary, and try to use lighting as natural as possible.
but - whatever you do - Do not use camera flash. It has the potential to ruin everything.

The hi-res textures should be almost identical to the original, smaller textures already ingame, only of higher resolution (obviously), more detailed, and less blurry.
the hi-res versions of the textures should be made at X16 the resolution of the original, then exported to DDS format before being shrinked according to the following formula:
Mostly, there are 3 kinds of hi-res texture releases: Low-End release (at which the result should be X4 the size of the low-res equivalent - 128 pixels/inch become 512 px/in, 256 becomes 1024, 512 becomes 2048 and so on), High-End release (X8 the original - so 256 = 2048 - not recommended for weak computers) and Ultra High-End release (X16 the original - so 256 = 4096 - only runs well on proffesional gaming setups).

You can also reply in this topic if you need help or have questions about this.

I don't know, who's good at texturing in this forum.
Nobody excluding QBBoss made new maps for this game, so retexturing isn't good idea a this time. I think it is good idea, but after create some maps. People should make some maps first.

Yeh, I know that tricky way with making x bigger texture, then scale to x smaller in editor. But also with UE2(Harry potter 3) you can use 'LightMap', it's default as 32, in UE1 looks like normally is 64, with high detail 32. So you can set it in UE2 even to 1. That means ultra detailed shadows, but then, textures where shadow didn't drop look like unlit. Of course, in real life we don't have that fading in walls like in games, but is it look really cool? I think yes, but in specific cases, not at all. Also, if we made 'LightMap' as 2(1 is making shadows from sprites didn't visible in game) and make this texture trich with 16x bigger, then 16x smaller in editor, we will get 32/2 = 16 * 16 = 256, so that's really cool stuff, Ive never trying doing that, but it's will look so unnatural(shadows will be black everywhere, without any fade), and if We will add to this pseudo-bumpMap trick to textures, and other material for each texture, We will get really wicked stuff and graphics...

But as I said, not all places in the map suitable to make them that detail(unlit effect), we must to set textures propeties inteligently.

And to make that, we will must to make new HP Package with HP textures... Uploading HP Textures means illegall and also, we will must to modificate UE for foot material settings using in HP's, otherwise the foot sound will be still like We running on stone even we running on grass texture...

Greets.
QBBoss.