I have tried both Open Office and Word, and the issue is the same. All looks fine until the document is exported to PDF, then the JPG image on the document becomes blurry. I hope someone can help.
After seeing the PDF with accompanying Open Office document it was clear the original image in Open Office was of low quality (96dpi). Too low to be used as stationery.
In Open Office it was not as clear as in the PDF because the page in Open Office is somewhat reduced in size on screen (with the borders). However when zooming in (with Ctrl + Mousewheel-up), it was very clear. Creating a PDF from this does not improve the image.
When creating letters with stationery in Open Office it is best to use high quality images of at least 300dpi and preferable 600dpi. Images from websites are usually only intended for display on screen and when used in documents tend to become blurry. However, you do have to find a good balance between image quality and final size of your document (You wouldn't want to E-mail a 4 Mb document every time) A final document of somewhere between 50kb to 300kb would be the most ideal.
Even better would be to use a .EPS file for the image with vector-information. That would be sharpest (and smallest in size) but the downside is you don't see the image on screen in Open Office (only when printing and exporting to PDF). You'll only see a "bounding"-box (placeholder for the image).
If the image only contains text (like in this case) it's also a good option to use the correct font and just type the text of the image in a textbox and move this textbox to the exact right place. This will also result in a small final document.