After importing your full size photos into Picaboo, downsized (or 'compressed') versions of your photos are used for displaying them within the software.
Rest assured that the full-quality/original versions of your photos will be used for printing, rather than the downsized versions you see within the software. We are currently evaluating this situation and will likely increase the size of the "display" images in a future update.
In the meantime, make sure none of your images have the low resolution warning, which means the photo in question may not be of sufficient resolution to print at high quality.
If you do not see that warning and your original images look fine outside the program, even if you zoom in on them, they should be printed that way as well.