JOSM Background Image

In simple terms how do you take an aerial image, say a .jpg or something you have saved from Google Earth and use it to trace the roads in JOSM. This is for my own use. The aerial imagery from Yahoo Maps is terrible for my area, not zoomed enough. I have used a Metacarta rectified image but they look terribly pixelated when they come into JOSM through the WMS plug-in (they loose 2/3’s of their data). They look perfectly fine in Photoshop before their rectified. One image I tried was a small 1 meg jpeg image and after it was rectified and loaded into JOSM, I saved it for further use and it was down to 341k, no wonder it was pixelated. I would like the ability to take a high res downloaded or even scanned aerial image of the area I’m working on and put it directly into JOSM without a big hassel. Surely this can’t be too hard. I have read every post here that I thought might help, no luck. I have also searched the net with no luck.

If someone could list some free software to use it would be greatly appreciated as this is just something I would like to learn and I’m not willing to spend money on commercial applications. Also I’m physically not able to do GPS tracking, hence the need to use aerial imagery.

Thanks for any help… Glen

Missed the plugin PicLayer, works great. Nice hi-res images to work with now.