Most people gave up on this effort years ago as I did. I went back after it about a year or so ago to find a way to make them work. These are textures that came on the 2nd CD that came in the retail pack of UT when it was first sold. It turned out that even Epic messed up making several of them so out of all of them, only a few worked properly and only if you managed to install them correctly and reconfigure your video card and video renderer in the game properly.
After days of testing and retesting I finally got a functional set of instructions built that worked perfectly. Then several months later a guy named DieHard contacted me here on this forum asking for help. He was hell-bent on remaking all of the S3TC textures. Yes, all of them! It took him forever but he finally did it and applied most of my instruction set for installing them to his process.
The results are pretty freaking great. Imagine 3mb textures now being 30mb large. They actually don't slow down your sytem at all. Most maps use many of the textures which have been updated so depending on how many of the textures a map uses that are offered in S3TC format will determine how much better that map can look. I have taken several screenies tonight of maps where I know certain textures have been replaced. start up your game and see what the default textures look like compared to these! Here they are:

This is the grass in DM-Ariza][

The moon in DM-Phobos

A distant galaxy in DM-Phobos or maybe just some space gases.

Looking down on DM-Phobos with the space-anomaly in the background.

Now DM-Phobos with the moon in the background.

Earth from DM-Inoxx

Another shot from DM-Inoxx

A shot of the Americas from DM-Inoxx
So you can see there is a big difference. DM-Deck16][ and DM-Conveyer both have significant changes in them and you should see the floors in the majority of default DM-maps. Stone, wood, boxes and especially the floors are all redone. There are patterns now on walls where they used to be blank grey squares. It like somebody pimped my game!
These textures work in practice sessions and online. They are NEVER-EVER to be used on a server. They are CLIENT-SIDE only. That means they are just for you but you can play online or in private with them.
I intend on pushing this to the point that I will be adding another page to my website dedicated only to this. I worked hard on it just to get other people's work to actually work. Now it works and works awesomely! I suggest that each of you wait until I write up another fail-safe set of instructions to use these textures and then give it a try. You won't regret it. They are awesome!
Oh yeah, I forgot to mention that smoke, flame and most decals like blood and gun shots look much better and when you actually shoot peeps the blood looks a little like it sprays out instead of globs out. Maybe it's just my super bad-azz video card doing that much. It is a BFG Geforce 7800 GS OC AGP video card with 256mb of DDR3. I don't think it is the card though. I think it is the txtures! I know the decals are the textures for sure.