What sort of object are you texturing? In order to reduce "smearing," you may need to apply and size your texture to individual faces. That is, if you simply apply a texture to the FRONT view of a box, the front and back views will at least look OK, whereas all the other faces will be stretched. This is because you've applied the texture along ONE axis.
In Point Edit mode, you CAN apply a different texture to each of the 6 faces of a box, and it will look better than applying one texture to the whole object. Another way to handle texturing is to use a separate tool, like UV Mapper, which essentially "unfolds" your object, on which you can "paint" a texture, and then "refold" it into Anim8or.
