There are several factors that affect Display quality:
Display Type.
A 24-bit display represents the image exactly. 256 color displays show fewer colors and therefore show the actual image less accurately. You should select a display option that matches your hardware configuration.
Display Resolution.
F/x takes advantage of high resolution displays by allowing you to scale windows to any size.
Image Resolution.
Image resolution is the physical size of the image in pixels. It is important to remember that a low resolution image is still low resolution, even in a high resolution display. Remember, the quality of the image that you start with greatly effects the resultant output image.
Image Quality.
A low color image (256 colors or less) can never be restored to full color. A true full color image are 24 bit and have up to 16.8 million colors. It is always important to remember that a good quality starting image will produce a higher quality output.
It is important to note that even though your display hardware may not be capable of 24-bit display, F/x holds and processes images as full color 24-bit at all times.