For some users of Windows Vista/Seven 64bit with nVidia graphic cards textures can be displayed incorrectly.

They key feature is that Nvidia driver screws textures somehow. So there is 2 ways to fix this:

First: try to reinstall all Nvidia card drivers you have installed.

The second way or perhaps even better way is not to change graphic settings in the game but do it via notepad in game config files.
1). Go to your game => options => video&audio, and set your graphic settings to default.
2). Apply, exit your game and navigate to C:\Users\username folder\Documents\My games\Heroes of Might and Magic V\profiles\your in-game profle name folder.
3) Open user.cfg with notepad and find following options:
setvar gfx_16bit_mode = 0
setvar gfx_16bit_textures = 0
setvar gfx_anisotropic_filter = 8
setvar gfx_ban_lags = 0
setvar gfx_depth_tex_resolution = 1024
setvar gfx_dynamic_lights = 1
setvar gfx_effect_alpha_treshold = 0
setvar gfx_fix_ban_np2 = 0
setvar gfx_fix_nv_np2_hack = 0
setvar gfx_frame_transition = 1
setvar gfx_fsaa = 4
setvar gfx_fullscreen = 1
setvar gfx_gamma = 1
setvar gfx_hsr = 0
setvar gfx_lag = 1
setvar gfx_lm_calc = 0
setvar gfx_lm_quality = 1
setvar gfx_lod_switch_distance = 300
setvar gfx_mapshot = 0
setvar gfx_nopixelshaders = 0
setvar gfx_noshadows = 0
setvar gfx_particles = 1
setvar gfx_quality = 1
setvar gfx_register_resolution = 1
setvar gfx_resolution = 1920x1080
setvar gfx_shadows_quality = 0
setvar gfx_static_nooverwrite = 1
setvar gfx_texture_mip = 0
setvar gfx_true_water_reflection = 1
setvar gfx_vsync = 0

And set up all as you wish. The easiest way to make changes is to open this file before step 1 and make copy of these settings then just copy past them and save.

After that you'll probably have no video issues except for game-menu-animation.