Photoshop quality help?

On my photoshop CS3, I save a picture of something then i paste it in, i move it into position (make it smaller) and then i hit complete the transition or whatever then it is all crappy quality and smooshed. any way i can fix it? this is what im trying to crunch to the bottem of my movie poster

http://americangun-movie.com/images/credit-block_0...

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