Re: Anyone know what I am doing wrong?
In the resize dialog, where it says "resample image" uncheck the checkbox or try switching it to "Nearest Neighbor". I think that should do it. (I use Corel myself, and Corel calls it anti-alias, but Photoshops' resample should be the same thing.)
Also, try sticking to square powers of two, as SL always resamples anything that isn't a power-of-two. Instead of 192x192, go up to 256x256.
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