88x88 is the native YouTube avatar resolution. I dunno how to set ppi...
For example, the avatar I use on this site goes from http://img198.imageshack.us/img198/3565/testkd.jpg to http://img132.imageshack.us/img132/260/test2vyb.jpg.
I barely see a difference. :shrug: Mind you, im looking at it from 3 feet away on an HD TV.
I checked the ppi. Its 72...
Its a common issue with youtube. Have you ever seen a sharp avatar thats a picture? Not a logo?