I've seen a few complaints around about this issue but no reasons cited for it and no fixes other than to use non-resized images.
The compression/blurring that occurs when JPG thumbnails are resized causes some pretty obvious desaturation. My jpeg_quality is set at 100 in media.php so I am uncertain if there are any other measures I can take to increase the quality. Sharpening certainly would help.
To see what I'm talking about compare the following test images (try flipping back and forth between tabs):
.jpg thumbnail: http://projectgentili.net/wp-content/uploads/2009/03/test_image_ps-200x150.jpg
.png thumbnail: http://projectgentili.net/wp-content/uploads/2009/03/test-image-200x150.png
I don't really want to resort to using pngs site wide but that seems like the only option at this point for me.