Like I have done with past versions, I compared the quality of the video and photos with scale to frame size on and compared it to scale to frame size off.
With scale to frame size on, the photos and video clips are automatically scaled to the size of your video.
So if you have a SD project using HD video, the video clips will automatically be scaled down to fit the screen. If you use 2 Mpixels photos for example, they will be scaled down to fit the video. This is an example and similar results should happen with HD projects.
The test I ran was to zoom in on the scaled photos, and do the same zoom on a photo where scale-to-frame size was un-checked. I used the motion effect to scale the photos.
I did a similar test with the HD video. The project settings I used were set to SD.
The results were the same as with previous versions. It is definitely better quality without any doubt if scale-to-frame-size is un-checked. It was mostly noticeable in the photo zoom, because I zoomed in further than I did with the video clip. Although the quality diffidence was also noticeable in the video clip.
So the collusion is, for best quality, leave scale-to-frame-size off. Then use the motion effect to downsize 1 photo to fit the project, and then copy that effect to all the other photos. Same for the video if your video is larger than the project settings.
The one con to this is that the themes work best with scale-to-frame size set to on. You can manually override this setting.