So many good questions. I'm using Worldcraft build 1315. I also have patched it with some kind of quakeadapter. (forgive me it's been awhile.) Yes I resize my textures using worldcraft's built in texture manipulator as I had done habitually in half-life and half-life2.
To make my game as pretty as possible I based my textures off of a Quake High Definition pack. They are 512 x 512 tga. Also many include the norm/gloss for bumpmapping.
They are resized because they come out MASSIVE in worldcraft when and even a texture that is 256 x 256 comes out huge. If I left the 512x 512 ones at the normal size (1x1) The quality is terrible. 40% looks ideal. And it is difficult to make real looking objects because of the unusual scaling. (To make a door look good is very hard. My texture would have to be something sized to .16 x .16 in Worldcraft. That is a no-go anymore.
I will say that I rely heavily on worldcraft's ability to manipulate the textures on the brush faces. Also my mapping is a bit insane, lots of faces and brushes. Though I have to say that Darkplaces is doing a kickass job with them. And after some messing with so does worldcraft. But there is a lot of messing...

Knives out. Catch the mouse. Squash his head. Put him in your mouth.