The loss in image quality happens when an image is resized. This is done by code in the concrete core, which uses php's GD library, and it's kinda just something that's going to happen when you resize if the original isn't very large. If you really want to keep images super sharp, I recommend not using the max size feature on the enlarged image (just set it super high), and then just upload the images at the exact size that you know you're going to use. Does this help?

Thanks for the reply. It answers my question. I am going to try it now.