there is a quick fix on the forums for that problem,
Blue coloured rocks, buildings etc
Affects certain cards, but is incredibly easy to resolve:
1. Open the rgl_config file in notepad, or go into the configure screen of Mount & Blade
2. In the config file, look for the no_dot3_bumpmap line and set it to 1. In the options, simply uncheck the box next to "use bump mapping"
thread here