I just wanted to add...

This issue is the same on my laptop, which is 3 months old as is on my desktop PC which is almost 3 years old. I also want to reiterate that I have galleries all over the internet and have not seen this type of distortion when they resize an image for display purposes. And by restricting the width to 700, you are resizing the image.

And as far as I know, there is no way to set options for an image resizing algorithm within a browser and even if there is, this would seem to be a bit much to ask of someone who is browsing your site to modify browser settings from the standard just to view images as they were intended to be viewed.