When you select a quality image as your desktop, windows converts the image to a jpg file with a pretty high (poor) compression ratio, and renames it to transcodedwallpaper.jpg
A way around this is to save your quality bmp/png image as a jpg file with minimum (zero) compression. Naming your modified image as transcodedwallpaper.jpg and dropping it in the
C:\Users\Your User Name\AppData\Roaming\Microsoft\Windows\Themes folder. Voila! A quality desktop background.
A longer explanation is available
here.