When it comes to shooters the most important things about the graphics are high fps and a high viewability. Basically if your fps drops below 50 during a match then you´ve got a problem.
I don´t recommend software mode, unlike Quake engine games the viewability in this mode is very bad in UT, so you should use the Glide, Direct3d or Opengl graphic modes. You will also get a higher fps in these modes with most video cards.
To achieve a high fps and good viewability you should turn off any unnecessary graphics effect possible.
In UT this is best done using the advanced options menu, by typing "preferences" in the console.
In the rendering options I suggest to turn off Coronas, Detailtextures, Shiny Surfaces, Volumetric Lighting, but leave highdetailactors on. With hda off all the smoke effects are removed, but you have a 1 second delay before you see that someone took shield and you will have problems seeing if someone has shield. You have to do this with the rendering mode you are using, if you are using direct3d but changing the 3dfx glide settings there will be no difference.
"the rendering options"
In the display options you should turn off curved surfaces, decals, dynamic lights, fractal animation, screenflashes and set the texture detail to low, but use a high skin detail. The minimum desired framerate should be set to something unrealistically high, for example 500 fps.
I have my brightness set to maximum, but this depends on the monitor, the video mode, drivers and additional programs like Powerstrip.
"the display options"
Why to set skin detail to high is easily explained. If all the wall and floor textures are blurred (low detail) then player, weapon and item models will stick out more from the scenery if they are high detail (like d_mipscale 666 in qw). If you can sacrifice those few fps for a better viewability, don´t hesitate.
In the game options you should set the weapon hand to hidden, gore level to reduced and disable the view bob for better viewability. You shouldn´t use gore level ultra low, because you won´t see if you hit with the pulse gun if the blood is green.
In the hud options you should use light blue as hud color, cause it`s the best color to see if you have boots. The player status size should be high enough to see the boots, but all in all the hud should be as small as possible, especially with voodoo cards, so the frag count and chat box should be disabled. Everything else is personal preference.
You should use a low resolution to get more fps, but I wouldn´t use a resolution lower than 640x480, because you won´t see some of the information on the scoreboard like ping/packet loss with lower resolutions.
You shouldn`t alter the field of view (fov). Although you have a better overview using a higher fov, your aiming, especially with instant hit weapons will suffer. In duel you don´t need a good overview, cause you should know where your opponent is anyway, but you sure need a good aiming. If I would have to change it I would lower it, but the default setting is fine imho.
Here is my unrealtournament.ini, if you want to take a look at it.