Somone else can probably better answer than I, but in short, yes, it does. That is why there is the abundance of specialized upsizing software made to avoid pixelization. In CS1, upsizing and choosing the "soft" option provides better results. Some say to upsize in 110% increments -- I don't know if that really works. I've heard with CS2 the upsizing algorythm is better.

Kort Kramer - Kramer Kreations