DOH!!!!!! (in a very Homer Simpson-ish manner)
After two days of pulling my hair out, re-installing IE (twice), service packages etc., going through all my display settings (20x), re-installing my graphics card, and searching through just about every forum I could find on the problem a friend of mine figured the problem out in 30 seconds. I am on a dial-up connection and have a feature from Telus (our telephone co. and my IT provider) called 'high-speed dial-up' which actually isn't higher speed lol, anyway, inside the properties of so-called high speed software is a resolution setting that had migrated to a lower setting thereby making my pixelated nightmare. I have no idea how it got to the setting it was at but how highspeed dial-up works is by lowering picture/graphics resolutions on all sites, or you can select sites where it doesn't do this. Long story short, it was the one thing I didn't even think of to look at, DOH! again

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Problem solved, am a happy camper again and feeling rather sheepish.