Hey guys, sorry I haven't been around for a bit. I am still working on this stuff, but I'm continuing to add new features and improve the way things are implemented, so it doesn't really make sense to put lots of temporary stuff into the SVN, which is why I haven't been posting patches.
The issue with the nighttime illumination is caused by the fact that JPGs can't handle transparency. We'll need to use .PNGs or .TIFFs or something instead. I'm still working on trying to make textures which are relatively small on disk but also look pretty; I've thought of several things I could potentially do to improve the texture file size, but haven't had time to implement them yet.
Also, don't worry about the nation borders; the way I did it before was the quick and dirty version (which was fast to implement). Right now I'm working on adding proper real-time glow/bloom effects, which should negate the need for having a separate "glow" texture for the nation overlay.
Finally, in terms of this game running on different systems, I'm making an effort to implement everything in such a way that all the new features are "optional," and can be disabled on systems with lower specs. None of the old rendering code is going anywhere, and new rendering code will have menu options to disable, as well as being automatically disabled on graphics cards which don't support the required features. This way, we should be able to get the game to look pretty on new systems without changing the "minimum" system requirements.
In terms of texture size, there are essentially two completely distinct issues, and I'm still not sure how important each one is. First, there's the size of the image files on disk. This is important to how long it will take people to download UFO:AI, and how much hard drive space it will take up. Frankly, I don't think an extra 30Mb of disk space will make that big a difference for any system that's modern enough to run the game at all.
The second issue is how much memory the textures take up at runtime; this is both an issue of system memory (RAM), and of dedicated graphics card memory. Here, the size of the textures *will* make a difference in terms of framerate on systems with different levels of graphics hardware. If this is the real concern, however, it should be relatively straightforward to allow the user to select what size textures they want to use, again allowing the game to be played on both high-end and low-end systems. This would still require us to have the high-res textures in the distributable, however.
Finally, as to bump-maps for ocean floors, they're easy enough to remove if people don't like them; once I'm done improving the rendering code I'll look at working on the textures. Do other people have thoughts about whether oceans should have topographic depth or not?