Help with texture creation.

[apocguy]

I have been having problems with creating textures. When ever I create a texture using vtfedit and load it up in game I get an unpleasant low quality version of what I wanted.

Here is what I want.

Here is what I got, notice that it is extremely pixely and ugly.

So what I would like to know is how do I get the texture to be as good of quality as the original .tga I imported. At the moment it seems to lose alot of quality. When I import the image which options should I select?

Here are the options, what should I be selecting?

 

[TheBladeRoden]

It has to be asked: what are your graphics settings?

 

[apocguy]

My graphic settings are pretty low, but the texture detail is set to high.
This texture is even very low quality when I jsut make it my spray paint in CSS by using the provided converter. However one of my older sprays has no decrease in quality.