The Scaling algorithms in PrE are not as good as those in Photoshop. That is why I always recommend doing any stills Scaling in PS, and not PrE.
It was the same in PrPro, until CS5, when the algorithms were changed, with the addition of MPE (Merucry Playback Engine) and CUDA support from certain nVidia cards. This changed the playing field, and in a big way.
When one is creating pixels, where they did not exist (Scaling up), the algorithm becomes very important. Other than using PrPro CS5/5.5, I am not sure which other NLE programs might do better than PrE can. Perhaps the algorithms in Sony's Vegas Pro are also better, but I have never used it, so cannot comment.
It might be worth the effort to download, install and test both PrPro CS5.5 and maybe Vegas Pro trials, to see if the improvement is worth the expense of upgrading the program.
Also, different formats/CODEC's will likely yield better results. A heavily compressed format, like AVCHD/H.264 will likely yield much lower quality, than say HDV, or RED footage.
The ultimate would be to actually do a 3-camera shoot, so that Scaling is pretty much out of the equation to begin with.
Wish that I had more ideas to offer you, and perhaps there is another program, along the lines of Red Giant's Magic Bullet Instant HD, that does a pretty good job of taking SD up to HD, than most other methods. I just do not know which one to recommend there.
I'm having the same problem, yet I'm not enlarging the imported image, rather I'm shrinking it. It's a 1920x2856 bitmap that is resized so it horizontally almost covers the video screen leaving a small margin and vertically goes over the edge. I downloaded Premiere Elements 9 the other week and still havent found out why Premiere Elements is blurring my imported image. This was not an issue in Cyberlink PowerDirector which I was reviewing before Premiere Elements. Actually, today I did get a sharp looking image on one of the videos I created, but I'm not getting it consistently, even when importing the identical (large) image/file. My guess would be that something goes wrong in Premiere Elements when an image is resized. Roundoff error somewhere ?
Oh well my issue was solved by deselecting "Scale to Framesize" for the individual image. How crazy isn't it that this is on by default, making images blurred by default if resized? Even worse: when the setting is unchecked in the general preferences window, images that are dropped on the timelife still have "Scale to Framesize" on by default! (Premiere Elements 9 Trial)
That default was chosen by the Adobe engineers and developers based on the "average user" of PrE. The assumption was made that most users would want the Assets to fill the Frame, rather than require that they make adjustments, or choose other settings. While that might work for the majority of users, it can cause others issues, such as your case.
Also remember that with ANY Scaling, pixels are being created. Scaling down is usually better, than Scaling up, but still requires the syntysis of pixels.
Good luck, and glad that Scale to Default Frame Size, being unchecked, worked for you.
Also, because the Scaling algorithms in PS, and PSE, are better than those in PrE, I really like to do all of that in the image editing program, and will ONLY Import Images larger than the Frame Size, when I need to do a Pan on the Zoomed Out image. Then, I will calculate the exact number of extra pixels that I need, and Scale to those dimensions. There are two benefits to that: I get to use the Scaling algorithms in PS, plus I do not force PrE to move around unused pixels. The latter reduces the processing load of my Project.
Good luck, and glad that you found the solution, happy editing,
While that may be OK for stills I am talking about maginfying moving video.
In magnifying I am starting with HD and effectively ending up SD that I would be perfectly happy about because the end product id DVD..
Do you know of any other cheap program that will magnify and shift HD video and produce either SD or HD output?
I could import this output into PE9 so it didnt have to change its size there and suffer the soft picture.