One; is the UVs set right? if not then it will look horrible.

Next, to make textures?

www.pixel2life.com Check out the photoshop section, it will teach you much.

This is what it currently looks like

This could either happen, whenever the scaling of the textures is wrong,
(check how the texture is scaled on the block)
or you should try to recompile the level (do not use update textures, this
option does not really work)

the texture on the floor is 1024 x 1024 x 16 and the wall is 512 x 512 x 16 and the scale is 1

does this happen after a complete rebuild?

yes, the floor should look like a wood floor and the walls should look light blue with little white designs on them

Does an additional Test Block render the texture correct?
(Add a testblock with the texture to the level,
or test the texture in a testlevel)

yes the texture worked on a seperate block

So this tells you, that it is a problem with the specific level,
not the textures.

How big is the wall and ground blocks?
Too big blocks will cause troubles,
also check how the block is "seperaded" by the BSP
(use f11 until you can see the red-lines when running you level)

if i does not work, put you level online for others to check.

I tired it again and it worked but the textures are too big how do i size them down?