Did you choose "High resolution album covers" when you ran kagu-scanner? If so, they should be a good bit larger. Some albums aren't of course. But most are. It just depends on what last.fm sends you.

Remember, if you have a cover.jpg, we'll use that instead. So if your cover.jpg is small, it'll be small when you tap the album.

We don't actually zoom on the albums. If we did that, they'd look terrible and pixelated. Instead, we show them at their normal size (1:1). If the normal size is larger than the viewable area, we scale it down to the viewable area.

For best results, use a cover.jpg with a very high resolution. But last.fm's high resolution album art is usually pretty good. For a good example of a high res last.fm cover image, check out the middle screenshot here: http://maemo.org/downloads/product/kagu/ (it's a lot bigger than +10%)