The problem you describe has to do with the dimensions (or resolution) of the image (width x height in pixels).
If you take an image that is 75x75 pixels, and stretch it over an area that is 1000x1000 pixels it will look blurry. To prevent images from looking blurry, it always best to start with a large size image and shrink it down.
To solve the problem, you need to add high resolution images to AudioLabel. The front cover of a DVD case is about 13cmX18cm, and most printers have a print resolution of about 118 dots/cm. So with some quick math, your DVD cover would need a minimum image size of about 1534 x 2124 pixels. Most digital cameras can produce images this size.
If you are getting images from Google Images, you can use the "Search Tools" to look for "Large" images. You can also mouse over the image to see its size in pixels.However, there is one very important trick to get the images into AudioLabel correctly
. When you first search Google Images, a small low resolution preview image is shown. If you copy and paste the preview image, you get the same blurry effect. To get the full size image you need to click the preview image, and then click the "View Image" option. Once you are viewing the image at full size, you can copy and paste into AudioLabel. So you can copy and paste any image from the internet, but you have to be viewing the image at the largest size possible.
Here's a link to some free background images that you can use with AudioLabel. These background images are high resolution and come in different sizes. http://www.vladstudio.com/wallpapers
Please let me know if you have any other questions.