I see, I've seen some people here who in Roster Showcase who post their normal port setups and their small ports are all super HD/HQ using art of the characters. So they can somehow achieve it without it turning blurry. I do use 1.1. I'll have to check around and see what I can do with PS. Thanks.

The thing is... OP said normal ports, using a different size make it 'custom' and not 'normal' IMO.
I thought they wanted to stick with 25x25. If not, then my bad.

i guess this become a heated debate as whats is normal haha

based on mugen default screenpack without change anything
for localcoord 320,240 character its 25x25
for localcoord 640,480 char its 50x50
for localcoord 1280,720 char its 100x100
for localcoord 1920,1080 char its 150x150
so if the char is native HD, its portrait will be clear

of course the question also can be answered as
how to make a clear 25x25 portrait
cant resize a hd into a small 25x25
the answer is like Nintendo ds said you need to draw it

for me change screenpacket to get hd is not normal
but if you scale down the portrait by half in screenpack like yugacurry said
character need to do following change
for localcoord 320,240 character its 50x50
for localcoord 640,480 char its 100x100
for localcoord 1280,720 char its 200x200
for localcoord 1920,1080 char its 300x300