This is an issue with winmo phones and I also had it on the hero. On the touch pro I could make it so the contact pics wouldnt sync because it has something to do with synching to the cloud with stuff like google, ms myphone, dashwire. The image gets compressed when synched so it gets crappy on the phone.
The interesting thing is I noticed on my wifes eris all the photos are large and clear and they are synced to fb and the google cloud. Where on the droid they are small and look like ass... so htc i guess figured it out....
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