Remove your "Facebook for HTC Sense" account and install this app:
SyncMyPix - Android app on AppBrain
You'll have to manually connect some of your contacts if their names don't match. This syncs their photos, but NOT the rest of their info. It does NOT bring all of your Facebook contacts into your phone and SMS apps.
This isn't my app; I just found it while browsing.
UPDATE 4/21:
UPDATE 5/10:
Good news! The developer finished his initial testing, so he added Android 2.x support to the official SyncMyPix app in the market. Links above updated accordingly. I recommend downloading from the market now to update the app to its most recent version.
SyncMyPix - Android app on AppBrain
You'll have to manually connect some of your contacts if their names don't match. This syncs their photos, but NOT the rest of their info. It does NOT bring all of your Facebook contacts into your phone and SMS apps.
This isn't my app; I just found it while browsing.
UPDATE 4/21:
I noticed that after it synced the new Facebook profile photos with Google, the pictures became pixelated again. So it seems that particular issue might actually be a Google issue, not a problem with our phones per se. Also, note that your first sync with Google after doing this might be time-consuming if you selected "full size" because it has to upload all of those photos.
Oh, and this app also lets you edit how it crops the photos.
UPDATE 5/10:
Good news! The developer finished his initial testing, so he added Android 2.x support to the official SyncMyPix app in the market. Links above updated accordingly. I recommend downloading from the market now to update the app to its most recent version.