Yes they can have high resolution skins. If correct there is a hardlimit of 512 x 512 pixels for skins wheater its player of weapon skins. But a couple a years ago i did test the S3TC textures on the playerskins and i could add a 1024 and 2048 skin to it. And seeing that test it looks like that S3TC can overide the hardlimit.
Here are two screenshots from that test:
S3TC_Playerskin01.jpg
S3TC_Playerskin02.jpg
The texture used in the screenshot is this 1024 x 1024 texture:
Of course it looks rediculous, but it proved its possible to switch the textures with the S3TC trick, and not only that, there seems no limit to the size. So theoretically it could be as large as 4096 x 4096 pixels. But i want to point out, its theoretical as I only tested till 2048.
Backthan i saw no point in trying higher, because i simply didnt know you could go as high as 4096 without having 8 terrabyte videocards. Extreme packages proof now you can do it easelly with a 512 videocard

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