Larger Images

I basically have an image that is about 260X200 and I want to make it larger. Only problem is that when I enlarge to about 500X400 is loses alot of the pictures quality. Is there any other way of doing so that the picture keeps its good quality. Or is there a way to restore it?

Upsampling a photo always incurs a loss of quality. It forces photoshop to create pixels where there were none, to make up details from thin air. And the program just isn't that smart. An upsampled image will almost always look worse than the original, it will have a larger file size, and will print slower too.

If you have the original, rescan it at a higher resolution.

You could try and trace the image to vector, the resizing it as vector, and turn back to pixel..but there is no good way of enlarging pixel-images, just doesn´t turn out good. :|