Good game (there it is again), but it was never pretty. One color scheme (brown) with some red thrown in here and there.
That is rather funny, considering D3 has a lot more color and many fans were complaining about how lacking in "dark, gothic" feel department it was. Say what you will about the style, but I think when played on the proper screen it still looks great.
Realize, it was a 2D game that came out before the HD craze, and all 2D games of that time and before it, when blown up to try and put on a 32" 1080p, are going to look pretty bad. StarCraft 1, Baldur's Gate, Fallout 1, all of them look "horrible" when put on a screen they were not designed for. I played an emulation of Monkey Island awhile back and it looked like shit when I attempted to full screen it, I don't hold that against it.
I love Torchlight too, it's a great game, but I would never tell anyone not to play D2 and just to play Torchlight, they both should be played because playing D2 helps you better appreciate where the genre is going and how well it has continued to evolve. Torchlight was the next evolution, and now D3 continues on from that. Whether Torchlight 2 continues from there will remain to be seen, but hopefully they do.