so can you recommend a free image editor?
If iI had to take a guess, it's the 'resolution'. It's high. What you listed (256x256) is your pixel dimensions. In PS, the pixel dimensions and the resolution are two seperate things.When ever I do something in a 300 resolution, I get almost the same effect. I go over the jagged edges with my blur tool at a soft setting. Does it do the same if you make the preview , say 750x750 or smaller?
so can you recommend a free image editor?
PAINT.net - is the hot one right now. They call it the PS killer. As of last month, you can open photoshop files in it. The set-up and tools is very similar to PS. Check out these articles on it at Lifehacker.
http://lifehacker.com/search/PAINT.net
GIMP
Someone over at DA had the same issue with her renders. I will try to look and see if I can find it. She found a solution for it after a while.