I did not resize the image for the display. Th actual size of the image is much large than the display and so I though that it would not be necessary. In fact the appearance improves if I resize the image to a lower resolution. This is counter-intuitive for me. I would have expect the hi res image to be better.
That is to be expected...when you set an image to be a desktop image, you would be best served by downsampling and sharpening for the EXACT size needed for the desktop–otherwise, the image will be downsampled by the OS which, as you've found, can suck.