Blocky, jagged, pixelated Avatars/glow effects?

I don't know when it happened, maybe after upgrading to a new PC and graphics card, but Avatars look like crap. There's no "glow" effect, they just have a really shitty pixelated outline around them. The rest of the game looks great, but they look horrible.

I've tried messing with all the display settings and can't seem to get it to work. Overlay resolution, background resolution (oversampling doesn't seem to do anything), bump mapping on/off, MIP mapping on/off, that mysterious "graphics stabilization" option, all kinds of stuff. But nothing makes the avatars look decent.

Does anyone know how to fix this?