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Here's the latest demo in high definition released by funcom: ftp://ftp.funcom.com/media/Age_of_Conan/videos/24jan07/conan_dx10_tease_720p.wmv
The demo is an in-game video. It looks like the texture is from a DX7 or DX8 game. The only noticeable DX10 feature is the lighting.
Comments
Well first off, those textures didn't look THAT terrible.
Secondly, notice where it says 'work in progress' at the end of the video? Many games use placeholder textures of lower quality when the game engine is still being fine-tuned. I wouldn't be surprised if right now the game runs fairly sloppy at highest settings (Read: high or mega high textures) so they're probably running that video on slightly lower settings to get a nice silky frame rate.
It just you.
Try watching some of the videos from the RPC'07: http://stage6.divx.com/Age-of-Conan/videos/tag:rpc
Although some are recorded poorly it gives us insight to magic casting more and shows off how the game is coming along.
The character textures and environment textures all look pretty high to me. This is all positive seeing as the game still has 5 months to go till launch.