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The image compression setting has a noticably detrimental effect on spice graphics quality. It's meant to be used for spice VDI but the vast majority of people don't use spice in a way that makes bandwidth usage matter. Boxes has already done this for a while as well: https://mail.gnome.org/archives/commits-list/2013-March/msg14904.html Turn it off by default if creating the VM on a local connection.