Easy Image Modifier InspireSoft
Droid (and X/2) use a wallpaper resolution of 960x854, and the resolution for a single screen is 480x854. And if your wallpaper has a lot of gradient (ex. fades) and makes it look weird try Wallpaper Set and Save.
As said before, if the resolution of the original image is a lot less than 960x854, it's usually going to look worse than expected, no matter if you resize it.