Not sure if i understand what you ask TheBadger...
But i made some tests anyway.
If this is not what you asked there might be newbies who would find this usefull maybe
Because many users here use tree objects i used a cylinder.
In 01 is a 500x500 texture.
[attach=1]
In 02 is a 1600x1600 texture. Not much a difference because the Cylinder is not close and the texture is not problematic.
[attach=2]
In 03 is the same 500x500 texture and in 04 the same 1600x1600 texture.
[attach=3]
[attach=4]
Now you can see how the 500x500 texture gets blurred.
But if you have a problematic texture you can get bad appearance without much getting closer too as in these 05 and 06 images.
[attach=5]
[attach=6]
Until now was the part i think i understand what i say. It doesn't have to be so of course
Now the other part...
The renderer can not add pixels where there aren't any.
I do not know how TG2 does render the textures.
But from the tests and renders i made until now i think if you put big textures on an object, TG2 renders the texture better with bigger textures because it actually uses the pixels that are in the texture(so to speak).
But if or how deep (?) it does i do not know actually .
I would not downsize an image unnecessarily .
Only if the image is unneeded big like in some Nasa images or for memory related problems etc.
Downsizing does destroy the image.
Make an letter in Photoshop ,Gimp etc. Save it (Save it rasterized. Do not leave it as a true type or similar).
Downsize it in half now. Then up-size it to its first 100% size again . Save it ones more .
Now compare the first original and the later downsized and up-sized images.
They are not the same anymore.
As in anything there is more about this like the filter you use etc.
You can look here for example. There are very nice things in this website.
http://www.cambridgeincolour.com/tutorials/image-resize-for-web.htmLook at the other links above too in this page guys.
But as a last word do not think that i calculate all i do with objects textures etc.
It is mostly instinctively and what matters is the last look.
If the image does look good , has no blurred surfaces there is no problem for me.
In this aspect it does not matter if i use a 256x256 or 10 000x 10 000 texture .