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RE: Display picture getting blurry?
I think the problem is that the server uses JPG to store the display pictures that show up on your windows live profile, which is lossy. The client uses PNG-24 which is lossless and will retain full quality.
The strange thing is that you mention is continues to get blurrier everyday, are you sure it continues to gradually lose quality? I would guess that it would lose quality the first time it's compressed and no more.
Let us know what happens when you use an animated display picture for your avatar.
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