they need to be 72x72 (99% sure) or 128x128...that looks like you used 48x48 and it stretched them..if you are using 72x72 or bigger than im not sure what would cause the blur.
Das B.A.M.F. @ 1.4Ghz
No they are reized automatically. I have made all of my icons 64x64. I just did an experiment sizing one at 72x72. Put them side by side and they are the same size.
In my research, I found out that Android resizes icons to the size of the smallest icon in the system. The icons in the app drawer are 48x48. To change the default size, you have to edit an xml file in the Launcher.apk (to my knowledge), but I'm not sure how to do that yet.