If your images don’t look good (e.g. too pixelated or stretched) you probably need to regenerate your thumbnails. You can do so using a plugin like Force Regenerate Thumbnails that will clear your Media Library unused image sizes and create the new ones used from our theme.
This issue may occur when you install the theme over an existing WordPress installation.
If you feel like images are pixelated, you might want to modify the images size. To do so, you might want to install a plugin called Simple Image Sizes, that will help you control the parameters of the image sizes defined by the theme (width, height and crop), and also allow you to create new ones on the fly.
As for image sizes declared by the theme, each image size has a name, which you shouldn’t modify, and a width and an height. If the height is left to “null”, the image won’t be cropped and its proportions will be used, according to the specified width.