Have you tried adding smoothing? I just found out about this handy little line of code that you apply to a Bitmap instance. It made all images look a lot better when I scaled them up.
example -
var bmd:BitmapData = new BitmapData(mc.width, mc.height, true, 0x00000000);
bmd.draw(mc);
var bmdCopy:Bitmap = new Bitmap(bmd);
bmdCopy.smoothing = true;
var holderMC:MovieClip = new MovieClip();
holderMC.addChild(bmdCopy);
manager.addItem(holderMC);