@srps Is the top pic after you installed the Team Avalanche patch and the bottom before? It looks like the game isn't finding the textures...show me your app.log and I might have an idea as to why...
No, both are with the patch installed. The top one shows Barret selected by the cursor, as shown by the yellow pyramid on top of him. If cloud were selected, Cloud would be textured and Barret untextured instead. When none are selected (ATB not full), both are untextured.
This is with or without Team Avalanche patch.
http://rapidshare.com/files/355492305/APP.LOGAPP.LOG here. I killed the game with alt + f4, hence the ERROR in the last line.
Edit: Removed some info that I found to be inconsistent, and probably just a visual mistake on my side.
I think I've found some new info, though, will try to get a couple more screenies up.
Edit 2: Alright, new screens

As you can see, if Cloud's in the top row, and he is selected, both his and Barret textures look ok. As soon as Cloud is de-selected or ordered to attack \ use item \ etc they both lose theire textures.

In this picture you can see that although no one is selected, Cloud is textured fine. I just swapped Cloud with Barret (that is, put Barret on first position and Cloud on second). Barret still has no texture though.

Cloud is still on the second position, and textured. Barret is now selected and as usual, he regains the texture when selected.