The Preview window is designed merely to test the navigation and get a rough idea of what your finished menu will look like.
It's a very low resolution preview and is no indication at all of what your final output disc menu will look like.
If you're still seeing this blurriness in your final DVD, then post a 640x480 pixel screen capture here of the finished menu page here to the forum so we can have a look.
Welcome to the forum.
I agree with the above comments, and for that reason, always keep some DVD RW discs handy, to burn a test, which is then played on several different players and TV's. That serves two purposes: it checks playability and also quality. As all of my TV's are now HD, from 35" to 60", all of my DVD and BD players have up-rezzing chips to help that SD (720 x 480 NTSC in my case), look as good as it is going to get. Actually, my first move is to Burn to Folder, and test that with DVD software, to check navigation, etc.. As Steve points out, when viewed on an HD computer monitor, I have to interpolate quality a bit, since there is no up-rezzing chip in my computer - I just get the 720 x 480 on the high-rez monitor.
Now, one thing that has tripped up some is the use of HD Menu Sets, for SD DVD Projects. You should only get the SD (Wide or Standard), but some try to go "bigger," and the authoring program must then down-rez the HD Menus, to SD. The Scaling algorithms are not that good, and there WILL be a noticable loss in quality. Always use SD Menus for DVD and HD for BD.