When I select a picture from the gallery as contact picture it shows up at nice resolution in the adressbook. Now as soon as I sync davdroid with my remote Baikal server, picture becomes very low resolutions and heavily pixelized.
In order to find the source of the problem I also installed CardDAV-Sync free, created a new contact with a high-rez contact picture and synced it to my Baikal server. In that case photo stays at its original size. Now if I delete the CardDAV-Sync account, I can still see the recently added contact since its is on Baikal and davdroid uses the same addressbook. Now if I edit that particular contact and change the phone number for example, sync then the contact picture is converted to the low rez version.