I didn't see any answers to this here, and I won't post a tutorial since I didn't figure this out myself, but I'm posting this here to help out some people who are interested.
Anyway, the default texturing within the Orange box hammer is very low res... the letters are almost impossible to make out on the trigger brushes, etc.
To fix this, do the following:
1. Use GCFScape to open "Steam\SteamApps\base source engine 2.gcf" and locate bin\dxsupport.cfg
2. Extract that file to SourceSDK\bin\orangebox\bin\
3. edit the file and change the line
"ConVar.mat_picmip" "2"
to
"ConVar.mat_picmip" "-1"
4. Save. Restart Hammer