(Quoted from Stephen Romaniello and Sign & Digital Graphics. Full article here.)
Increasing the size of an image has always been a source of consternation to the digital artist. Increasing the size or resolution of an image can sometimes compromise image quality, resulting in blurred edges, dulled colors and diminished contrast (see Figures 1A, B and C). Understanding how the various sizing methods affect the image helps you make an intelligent decision when you need to blow up your thumbnail-sized image to ginormous proportions. Hopefully this article will show you the ropes.