Vegas Pro. Purchased from Magix.

Is preview set to best/full?

Use a photo that is the same resolution (or larger) than your Project.

For instance, 1920x1080.

Yes

Already did that

Should look good. Can you confirm the project and image resolution? What file format is the image?

Make sure you have your preview set for Full Resolution.

Jpg 300 dpi. Also used png, made no difference. Lowered the dpi, made no difference.

Did that

Can you post a full screenshot of your preview window with "degraded" photo?

@Peggy-Polk Hi, you need to share more information, can you take a screenshot, press the Windows key+Shift+S all at the same time, the screen will go dark & some options will appear at the top of the screen, choose the middle option, when you take the screen shot it will appear in the Notifications (bottom right) where you can open it & save,

Then upload on here using the arrow button next to the smiley at the top of a new comment,

Better info on the pictures you're using would be helpful.

There's an App called MediaInfo, download it, it's free & a fast download with no added adverts or any of that rubbish. https://mediaarea.net/en/MediaInfo

After downloading, right click on the media file in your Windows folder, open MediaInfo, choose Text from the options at the top, Copy & paste the information in a new comment on here 👍

Like this

Also post pictures of the Project settings, & the settings in Vegas Preferences - General, Video, Editing, Display, File IO. these photos can be taken with the Windows key+Shift+S.

A lot of this may well have nothing to do with your problem but too much info is better than too little, 👍

300dpi isn't a resolution, DPI is actually just for printing and changing it has no effect on anything.

What are the pixel dimensions of this image? Right-click on the media and look at properties. Most likely far too low for your project and render resolution.

That video you posted is 240p. That will always look bad.