I'll start with saying I've made a thread somewhat related to this subject almost a year ago: http://forums.macrumors.com/showthread.php?t=551024 where I was wondering why my photos synced to the iPhone would double in file size when transferred from my computer to the phone. Back then, the photo albums on the phone were of acceptable quality so I never tried to push the issue. Recently, I would say after 3.0.1 since I don't remember 3.0 having this problem, the photos in my photo albums are of absurdly low quality. Here are 3 photos that I've emailed from the phone: These are the originals. http://img269.imageshack.us/img269/5791/img0697b.jpg http://img268.imageshack.us/img268/6889/img7741k.jpg http://img9.imageshack.us/img9/3673/img9532i.jpg That gradient banding is horrible. And I'm quite sure it didn't used to do this. Something else to note, related to my aforementioned thread, the file sizes for the photos from the phone range from 40 to 100 KB. My original files are in the 300 to 500 KB range, saved at maximum quality from Photoshop at 1024*683. The originals on my computer weigh in at around 650 MB: iTunes optimizing these files inflates the size to 800 MB while making them lower resolution and lower quality. So yeah, what the hell? Did they change the compression algorithm at some point? How are these 40-100 KB files taking up so much space? Unless the phone dynamically saves an even smaller file to email and MMS. Can someone try syncing my 3 originals through iPhoto or Aperture and check if those programs handle the optimizing differently? Addendum: My originals are saved from Photoshop. Photos are synced manually through folders. I don't use iPhoto or Aperture. I've deleted the albums and resynced a few times already. There are 1340 photos on the phone, 211 are from the Camera Roll.