I've had this problem for quite some time.
All .jpg and .png files are interpolated improperly when either stretching the image or squeezing it.
Some sort of blur is always expected, but this is far beyond that :/
error.jpg shows some images when zoomed in, while browsing in Firefox. You can see the distortion, no anti-aliasing.
error2.png shows some images when 64x64 pixel icons are squeezed to fit the fluxbox menu. For example the Skype icon should be a round bubble, and the Kadu icon should have two eyes and a smile.
Since the problem is more or less everywhere and I can't be sure for how long, I think it's a problem with some libraries.
Any ideas ??
I'm using:
xorg-server 1.5.3-r6
fluxbox 1.1.1-r1
nvidia-drivers 180.60