What are your LODGroup / Mip map settings on the grass texture? Something seems abnormal about the second screenshot to me. Maybe also check your 'Opacity Mask Clip Value' in the material settings.
Otherwise, turning on 'Dither Mip Map Alpha' in the texture properties can sometimes get you a more a more full look on distant objects.
I believe you can force a greater distance on mip-mapping levels in the material's properties, which should get you some more detail in the grass. However, this would be pretty expensive in real-time (especially if you start adding more grass). However, if it's just a beauty shot it might work out.
The first thing you should really do though is get your ground texture down. Assuming it's a grass/dirt texture, it will likely hide the 'low detail' grass in the background.
You can also manually edit the mip-maps, in photoshop using the .dds tools...although last time I checked (2011) UDK was still unable to import .dds format textures without a bunch of hassle.
Think of it as the same thing as Level Of Detail on polygon models. As you get further away from the object, its quality is reduced by a certain (specific or automatic) amount.
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PS. This is in UDK
Otherwise, turning on 'Dither Mip Map Alpha' in the texture properties can sometimes get you a more a more full look on distant objects.
The first thing you should really do though is get your ground texture down. Assuming it's a grass/dirt texture, it will likely hide the 'low detail' grass in the background.
I dont know what mip-mapping is ,but ill sure take a look when I got the time!
I looked it up, anyone can point me to a tutorial on how to obtain this result from photoshop and import it to UDK?