This is not exactly true. Many of us (myself included) continue to have this issue, even with 2.2.1. If you search this forum you'll find the thread where we discussed it. If I recall correctly someone even posted a link to a picture so you could test it out. The picture looked great in Safari but as soon as you saved it to the photo album and viewed it there it looked blurry. It's an unacceptable bug that Apple has yet to effectively address.