Comment 7 for bug 71476

Not sure if this is a totem or gstreamer bug... ximagesink does no scaling by default at all so totem must add the videoscale element somewhere. xvimagesink OTOH scales via hardware so this can't be changed in any way.

Without having looked at the totem code possible fixes are having bilinear scaling as default in videoscale (instead of nearest-neighbour) or telling totem to set the property correctly when adding the element.
IMHO the latter should be done in any way, with something in totem's preferences to select the algorithm used as bilinear might be far too slow on some machines while nearest-neighbour is still fine.