Thumbnail quality has long been a complaint of mine, but I think there are a few specific issues here.
First, if the video is from a television show for example, the episode thumbnail is provided by TheTVDB, or if it's from YouTube they seem to get the thumbnail from there - I don't know if that applies to your example, but those images are often very low resolution.
Secondly, I agree that Media Center should be generating higher resolution thumbnails for videos than it currently does. There's no reason they couldn't be saved at the video's native resolution instead of the low resolution, highly compressed thumbnails it currently generates.
Now they don't have to be PNG screenshots, but they do need to at least use full resolution chroma, and the less compression used the better. For high quality JPG I wouldn't use anything less than 95, and anything below 90 just looks awful.
The anti-aliasing setting only applied to Theater View, I believe, and has been broken for a long time. Thumbnail/image scaling is unrelated to that setting.
I would assume that this area has not received much attention because they will be migrating from DirectX to OpenGL to support Theater View on OS X and Linux.
What you won't have noticed by only using Media Center for video, is that at large sizes you do generally get high quality for album art (though Media Center converts lossless PNG cover art to JPG) but at anything below about 400x400 the quality is pretty rough, and below about 160x160 it is completely unacceptable.
http://yabb.jriver.com/interact/index.php?topic=85083.0