It really only seems to be certain pics. For example, on yahoo.com ads that are being served up look awful. I have my Samsung set to "fit screen" but wish I could reduce the size of the text to sharpen it up while leaving it on to "fit screen". Guess this is the price I pay for wanting a large screen and sitting only a few feet away.
That is going to depend on the resolution of the picture and the "space" it has to fill on the webpage. If you have a 640x480 pic and it has to fit a 1280x960 space the pic gets enlarged, then you show it on a 40 in. 1920x1080 screen & it uses the enlarged pixels, and the picture viewing quality goes down fast!