You can use square textures, it just messes up some diagonal lines. Also, if you are using one of the square viewport layouts, you know, to state teh obvious.
I've also noticed that sometimes jpg look sloppy, and you can't tell until you try, which means it is likely the compression in the particular file.
Giant textures also do weird things - I'm talking large at more than 2000 on a side. Some details disappear, others don't.