getting a clear background image

I’m following a great beginner’s tutorialon youtube http://www.youtube.com/watch?v=zqTH5Chty5s
The problem is that my background image is blurry when brought into blender. The opacity is at 100 percent. I flipped this image 180 degrees in photoshop and used the magic wand and eraser to get rid of the background. I then saved it as a png file. Where have I gone wrong? Thanks

I solved the problem I was having on the source photo by clicking on it and thus enlarging it and then saving it.