Scale an image nicely in Delphi?

You could try the built-in Delphi ScaleImage from GraphUtil

If you revert to using Win32 API calls, you can use SetStretchBltMode to HALFTONE and use StretchBlt. I'm not sure if this is provided using default Delphi calls, but that's the way I generally solve this issue.

Update (2014-09) Just now I was in a similar situation (again) and had a TImage in a TScrollBox with lots more going on on the form, and really wanted Image1.Stretch:=true; to do halftone. As Rob points out, TBitmap.Draw uses HALFTONE only when the destination canvas is 8 bits-per-pixel or lower and the source canvas has more... So I 'fixed' it with assigning Image1.Picture.Bitmap to one of these instead:

TBitmapForceHalftone=class(TBitmap)
protected
  procedure Draw(ACanvas: TCanvas; const Rect: TRect); override;
end;

{ TBitmapForceHalftone }

procedure TBitmapForceHalftone.Draw(ACanvas: TCanvas; const Rect: TRect);
var
  p:TPoint;
  dc:HDC;
begin
  //not calling inherited; here!
  dc:=ACanvas.Handle;
  GetBrushOrgEx(dc,p);
  SetStretchBltMode(dc,HALFTONE);
  SetBrushOrgEx(dc,p.x,p.y,@p);
  StretchBlt(dc,
    Rect.Left,Rect.Top,
    Rect.Right-Rect.Left,Rect.Bottom-Rect.Top,
    Canvas.Handle,0,0,Width,Height,ACanvas.CopyMode);
end;

I use GDIPOB.pas's TGPGraphics class

if Canvas is TGPGraphics, Bounds is TGPRectF and NewImage is TGPImage instance:

Canvas.SetInterpolationMode(InterpolationModeHighQualityBicubic);
Canvas.SetSmoothingMode(SmoothingModeHighQuality);
Canvas.DrawImage(NewImage, Bounds, 0, 0, NewImage.GetWidth, NewImage.GetHeight, UnitPixel);

You can choose the quality VS speed factor by changing the interpolation mode

InterpolationModeDefault             = QualityModeDefault;
InterpolationModeLowQuality          = QualityModeLow;
InterpolationModeHighQuality         = QualityModeHigh;
InterpolationModeBilinear            = 3;
InterpolationModeBicubic             = 4;
InterpolationModeNearestNeighbor     = 5;
InterpolationModeHighQualityBilinear = 6;
InterpolationModeHighQualityBicubic  = 7;

and smooting mode:

SmoothingModeDefault     = QualityModeDefault;
SmoothingModeHighSpeed   = QualityModeLow;
SmoothingModeHighQuality = QualityModeHigh;
SmoothingModeNone        = 3;
SmoothingModeAntiAlias   = 4;

NOTE: This would require XP or later or bundeling the gdiplus.dll in your installer.

You really, really want to use Graphics32.

procedure DrawSrcToDst(Src, Dst: TBitmap32);
var
  R: TKernelResampler;  
begin
  R := TKernelResampler.Create(Src);
  R.Kernel := TLanczosKernel.Create;
  Dst.Draw(Dst.BoundsRect, Src.BoundsRect, Src);
end;

You have several methods and filters to choose when resampling an image. The example above uses a kernel resampler (kinda slow, but with great results) and a Lanczos filter as reconstruction kernel. The above example should work for you.