When I set the textures to Very High, and restart the game, the setting doesn't stay. I assume the game doesn't have Very High resolution textures?
Overall I'm disappointed by Episode 2's graphics. It looks pretty much exactly the same as Episode 1, cept for the better physics. We didn't get realistic rain effects, or the dynamic shadows or other stuff in the tech demos for newer versions of Source. They really should have tightened up a few of the textures you look at a lot, like Alyx's jacket and pants, or the the car parts, or door ways etc.
Overall I'm disappointed by Episode 2's graphics. It looks pretty much exactly the same as Episode 1, cept for the better physics. We didn't get realistic rain effects, or the dynamic shadows or other stuff in the tech demos for newer versions of Source. They really should have tightened up a few of the textures you look at a lot, like Alyx's jacket and pants, or the the car parts, or door ways etc.