After upgrading to Lion, I'm finding that Finder is stretching the preview of smaller images (~100 pixels), which is making them look terrible.
Is there a setting somewhere I can check to have small images show at actual size?
You can press the space bar to open Quicklook; it opens quite fast, and you can still use the arrow buttons to navigate through your images.
In the Preview bar, click 'Enter Full Screen' which is underneath slideshow.This will let you view the images in their actual size with the nice black background. It's basically the 'Slideshow' function from OSX Snow Leopard.