I keep seeing loads of people in towns with blue and white boxes where I assume items should be?
It's almost like my client isn't patched or something, but there's no way to patch it. I downloaded via the torrrent and did everything correct, the game works perfectly apart from that issue.
Yeah, that's a placeholder the game uses when it can't load a texture, be it because of corrupted files or due to being referenced to a texture name it can't find, which can happen with bad or conflicting "texture replacers" and the like.