I think the reason for the blurring in your slide show is this :
"There is a downside to presenting still pictures using video. Video files, at best, offer 720 x 525 resolution. The most commonly used video file formats only support up to 640 x 480. All but the least expensive digital cameras offer far greater image size, so displaying your images in a video presentation will require you to sacrifice sharpness.."
This is taken from
microsft.com...
Edit: Spelled slide show wrong