A while back, somebody (maybe SamuriHL) asked for more control over image scaling in Media Center.
I meant to respond at the time, but didn't.
The image engine in Media Center has a variety of image resizing methods depending on the quality / performance required.
In high-quality mode, image stretching is done with bilinear resampling and image shrinking is done with supersampling.
My understanding is that supersampling is superior to Lanczos, Bicubic, etc. for extreme shrinks since it doesn't skip source pixels when building a destination pixel. The trade-off is that it can be slower.
The image engine is used for all 2d graphics in the program -- all of Standard View, texture creation in Theater View, subtitles, etc.
When viewing actual images (like JPEG files) in Media Center, a combination of the GPU and CPU is used. When moving, zooming, etc. the GPU is used to resize and display the image. When the image stops moving, a high-quality pixel-perfect overlay fades in over the top rendered by the JRiver algorithms listed above.