Pixelation is the process where every individual pixel of your original image gets enlarged if you upsize your image. The pixels themselves become larger, so they become more visible. Now, the upsizing in PS CS2 doesn't enlarge the pixels, it recalculates them. Let's say you have a sharp border of 2 pixels in your original image... The upsizing won't make those 2 pixels larger, but will recalculate the pixels and make a 3 pixel border out of it. The only thing is that your original sharp border will look slightly less sharp in 100% view in the resulting image, because the recalculation will take some of the adjacent pixels on each side of the border into account. But that is not the same as pixelation. The pixelation does happen when you enlarge a GIF image however, because GIF images are made up differently, with fixed pixels (not continuous tone pixels). Strictly speaking, you can't enlarge GIF images for that reason. Needless to say, you need the best possible original image quality (highest possible compression quality, or no compression at all, like RAW format) to make a good upsized image...

We do not see things as they are. ǝɹɐ ǝʍ sɐ sƃuıɥʇ ǝǝs ǝʍ