The checkerboard is a good texture to apply to your mesh after you've laid out your uv's to see if there is any distortion going on. To get the small sharp checkers change the repeat u and v to a larger number like 10. (by default I think it set at 4) you'll find that attribute under the "place 2d texture node". Then get to the attributes for the material itself, lambert if thats what your using. Go to the "hardware texturing" attribute and change the texture resoulution to "highest (256 x 256)".

That should do it!