In the DVDStyler forum I found several complaints about blurred background images. Have a look here:
https://sourceforge.net/p/dvdstyler/...read/8fee0457/
https://sourceforge.net/p/dvdstyler/...read/3f3e13d8/
Keep in mind that your HiRes image must be converted to the DVD supported SD size (720 x 480/576). When you compose your menu on a HiRes monitor using a HiRes background image, of course it will look much better than the final DVD.
You probably should prepare your background image in the final SD resolution. Then you can play with different (larger) fonts and make it look as good as possible in this resolution.
Cheers
manolito