is it essential to play at low graphics?

[applev]

However If I remember rightly if you just use picmip 16 from default settings you get nice clean textures yet there's still enough shadows/shading to allow easy depth perception.

I agree on this, r_picmip 16 looks very nice.

by the way I'm using an i3 and gtx460 and my framerate stays at 125 yet drops to like 118 for a nanosecond every 4-5 seconds,... hardly noticeable but whut?

Did you do all the usual things, like removing unneeded background programs, or verifying that you don't have viruses, or maybe disabling/changing your antivirus software?