When I load backrounds, the pixels expand and the image appears blurry. How can this be fixed?
Make sure your images have the right resolution.
Also, I find it helpful to uv map the image to a plane and put it behind my scene. Then set it to either ‘shadless’ or give it a bit of an emit value to pop out. This isn’t going to really ‘solve’ your problem but it will give you a lot more control over how much of the image you see and that might help improve the situation.