As ffmpeg2theora (the easiest tool for ogg/theora conversion) doesn’t have any «sharpness» options or ways to specificy image scaling, best way to get crisp results is by fixing and compiling. This can be achieved by opening src/ffmpeg2theora.c, and changing SWS_BILINEAR to i.e SWS_LANCZOS, and recompile. A full list of available options and keywords can be found under ffmpeg/libswscale/options.c.
New Cortado java web player version 0.6.0 released end March 2010. Can be found here.
Note: compiling ffmpeg2theora should be performed by syncing SVN’s from http://www.xiph.org/svn/ in order about like this: ao, ogg, vorbis, (optional: speex, flac, kate), vorbis-tools, theora, ffmpeg2theora.