I have now applied a workaround described in: http://talk.maemo.org/showthread.php...090#post703090

When you tell the application to use a JPEG picture it will be cropped and downsampled. When you tell the application to use a PNG picture it will not be put to a lower quality. This is since the standard picture file format for this is PNG: http://talk.maemo.org/showthread.php...195#post516195

So I took the original JPEG picture, opened it in Gimp, stored it as PNG picture, uploaded it to the device and told the N900 account mask to use this as skype profile picture.

Nevertheless I think that the correct solution would be 1) a notification to use PNG if downsampling is not wanted and 2) a checkbox that the profile picture will not be uploaded to the Skype server in the web.