How to resize big elements so the pixels dont make it blury?
 

When I add this tree to my layout its too big. So I drag the corners to make it smaller and it becomes a blur. Please advise?

what program are you scrapping in?

If you are using Photoshop, it looks blurry until you apply the changes. Is there a way to "apply changes" in the program you are using??

I'm using pse 7. Once I apply the changes, its still blury.

If you are making something smaller, it shouldnt' pixelate if you are using the original file to drag onto your layout.
Not larger, it WILL pixelate. Or if you made it bigger first, then are trying go go back small, could have issues.
Is the original clear on your screen?