Just throwing my voice in this. I believe its a bug. WP support reply with what size is the tile but it doesn't matter. I've tried all different kinds of resolutions but it still comes out pixelated. It kind of boggles the mind on how this was missed.
This happens when you update your profile/avatar picture on one of your networks. I noticed this yesterday when I changed my Microsoft account picture on my Windows 8 laptop. The picture got pixelated on my 8X and on my main desktop computer with Windows 8. The same happens with wallpapers between Windows 8 computers, even the "original" (the one you set on one computer) becomes pixelated after it syncs to other devices.
On WP8, the easy fix is to go to the Me tile, tap on the picture to change it and select the same picture and publish it to Twitter or Facebook. I like to have the same picture on all of my networks so If I want to use another picture, I change Outlook first (can also be change from Windows Live Messenger or Windows 8 Me app) and Facebook and Twitter.
It's a problem on their servers I guess because of the issue I described with wallpapers on Windows 8.
Any other thoughts on this -- same thing happened to me, I don't have Facebook or Twitter. It's happened to both my Me tile and all of my contacts with pictures (as far as I can tell). Not an absolute deal breaker, just makes the OS look really sloppy.
I noticed this yesterday when I changed my Microsoft account picture on my Windows 8 laptop. The picture got pixelated on my 8X and on my main desktop computer with Windows 8.
I think you're absolutely right -- Windows 8 seems to be downscaling the images when syncing. The other day I posted a profile picture from WP and it was perfect until I logged in to Windows 8 the next day, and the WP tile immediately got pixelated. Then I tried uploading the picture again from WP while still logged into Win8, and this time the tile pixelated in less than a minute.
dont know will work on 8 or not but i seen on my 7.8 that adding same picture in live and fb and then syncing both gives low resolution picture in me tile. but if i go to live and remove profile picture and then resynch both fb and live i get my crisp me pic back. i think its something associated with wp picking profile pic from live over fb and live downscaling pic somehow while sending to phone.
Is the photo you're selecting already cropped? The only time I've ever seen my profile pic pixelated is if I substantially cropped it when I made it my profile pic. The subsequent compression of a cropped photo ends up looking pretty bad because the photo was already low resolution (cropped).
EDIT : Oh never mind - I see you're saying it goes from looking good to looking bad.
It's the most recent photo on whatever network you have be it your live mail or google or facebook. the only one that is clear at all that I have found is facebook so, change your profile picture on facebook and hit sync and it should change back. (thats what I did anyway after accidentally changing my live mail picture and it worked great)
Its because you are posting it to live too...it becomes heavily pixelated through live..so best thing you could do is post to live first and then Facebook...make sure to post your Facebook profile pic at the end and it will be fine...
thanks JoeDizzle33... Just posting the sequence of operation for others:
click on me tile
click on photo(it opens up update ur profile page) here, select sync FB account only
click on photo again(it will open up ur photo albums.)
Pick a photo and click on post.. it immediately changed my pic :D