Other than using Commercial software like PSP and Photoshop you can use a free image software app like xnview which has some image editing options. You can download it from download.com: http://www.download.com/XnView/3000-2192_4-10414429.html?tag=lst-0-1
The above link is for the Windows version. If you need it for Mac or something else I believe other versions can be found at http://perso.wanadoo.fr/pierre.g/xnview/endownload.html
The software for other operating systems may be different from Windows versions so the directions I give below may not work exactly the same.
Once you download and install xnview , you can open an image and do the following. Under the Image
drop down menu (third from left after file and edit menus) you can select the option to "Resize". Then to make the image less blurry after resizing you can go to the Filter
menu and select "Effects". If you scroll down to "Misc." options you can use the Sharpen
filter. It has a slider to adjust the strength of the effect.
When you are finished you can go to the File
menu and select "Save As". JPG is normally the default option when you save but it can be selected under the Save as type list below where you can type in a file name. To control the quality of the image you can select the "Options" button in the "Save As" box. I hope this helps more than confuses being the it takes too many words for me to explain everything. It's really a lot simpler than it may seem.