According to the official release notes:
The option for "Shrink to fit" has been removed in Firefox 2. If you wish to change this from the value you had set in your previous version of Firefox, change the value of browser.enable_automatic_image_resizing.
One would carry this instruction out by putting "about:config" in the address bar and finding that value and adjusting it. To be clear, the change *should* take effect immediately, no browser restart should be required.
I recently noticed that all the images rendered on my laptop were suddenly all jaggy and weird, like they were being resized by the browser. They were. I never told it to, but it was doing it. Couldn't find a relevant setting in the options, so wound up googling around a bit, and was happy to find the above solution.
Problem is, it doesn't work. And to make it a little stranger, my desktop machine is running the same version of Firefox, has the above setting set to "true" and does not exhibit the annoying image resizing. I should, in the interest of science, mess with that setting on my desktop machine, but honestly, I'm afraid to. I'd be really annoyed if I had to put up with the image resizing on my home machine as well.
I'll post a solution here if and when I find one.