When I insert jpgs, etc., they loose resolution and the product looks bad. screen pixel size 128x48 (8:3 radio). when I click on the picture AFTER i include it, and the mouse has control, the picture looks as good as the original. I've tried changing the type to png and other formats, but they are all the same. the only things i have available to edit the picture is Picasa, MS Paint and GIMP. Thanks in advance.
Sounds like you are creating web graphics. Your project is almost the a standard web banner size. It's very small. If your composition window is set to full resolution and 100% scale and the imported images are not perfect then follow these instructions.
Do that and you'll get a pixel for pixel reproduction of the original image. If you scale, rotate, or mix pixel aspect ratios then the pixels will be reinterpreted. If the image is an odd number of pixels high or wide then the pixels won't line up.