Jeez, did that come with a 32" screen or what? What an insane resolution.
It does look like really bad upscaling, so I have to ask - did you use the 2x option in ZC Launcher? If you go to the ZQuest tab, top right of the Option Set 1 window, there's a Scale option that lets you select up to 4x. Apparently it closes the program if it can't fit onto your screen, so I don't know what 2x looks like since it's just a handful of pixels too tall for me to try (which is to say, I don't know if there would be forced upscale blurring, or if it would scale properly).
The reason I ask is, since I don't know if the upscale blurring is inherent to the program or your video drivers, it may be worth looking into any kind of control panel your display came with to see if you have control options for this kind of thing. For example, I have a Radeon card, and the drivers include an ATI Catalyst Control Center, where I can pick my display panel, go to its attributes tab, and select things like enable/disable GPU scaling, and what kind of scaling I would like it to do. For example, when I run ZC fullscreen with "maintain aspect ratio" selected, it will keep the proper ratio but upscale it (with blurring) to fit the height of the monitor, leaving black bars on each side; "scale image to full panel size" will stretch it to fit the widescreen length as well as the height (with even worse blurring); and "use centered timings" will display the program at its exact given ratio with no upscale blurring, leaving black bars on both the side and the top. Or I can just disable it to get rid of any upscale blurring - unless, of course, the upscale blurring is inherent in the program.
So, if it's still blurry even with ZC Launcher's Scale option, then see if you have a video card control panel that lets you set options like those.