it seems to be an issue with the user-specified (uploaded pictures from computer/phone's camera) thumbnails, because while those are pixelated, the ones pushed from facebook are crisp as can be

 

I noticed that to, the pics for contacts look awful. Wish I knew why.

 

Mine look fine, it only looks pixelated when you choose to sync with google. If added to just the phone and you use a quality picture from your phone for the contact its fine.

 

Deff a fix that should come with an update. I have the same thing, however my HD2 didn't have this problem. I'm wondering if the legend or desire have the same issue? Since there both running the same version of Android 2.1 with the newer version of sense.

 

I seem to have discovered a way of clearing the contact pictures up:

Tap the name of the contact you wish to repair in the favorites (or your big contact list), then go to the bottom of their info and tap Edit (Edit contact) so that you can change their phone number, address etc.

Next, tap the icon on the very most top left, it should be the photo you already selected, or the little camera icon if you have not yet set a photo for them.

Tap 'Photos', select the photo and crop to your liking. Save the photo, then scroll down and make sure that you save the changes to your contact at the bottom!

This should stop the pixelation, it seems as though there is a bug with using Photos app to 'set as' for a picture and the way it deals with resizing the picture to apply it to the contacts. It goes without saying that one should try to use a decent resolution image if you can help it, too.

Hope this helps!

 

Try this. Convoluted, but it's the only solution I've found that's permanent.

 

they have to fix this. it has to do with google sync.