agree on 3) most browsers just use linear interpolation when resizing images, which makes sense from a performance point of view, but looks terrible.
Better to use a bi-linear or cubic resize, more computing up front, but better images, this is probably the reason they do it
If you resize the image in steps, with each resize at least 50% of the previous step, you can do a pretty decent approximation of cubic resize using the canvas. Doing this for a year now, we've gotten no complaints and we have designers as clients :)
