Charity,
The reason that it appears fuzzy is that Photo Story 3 is attempting to size
the final output small enough to fit in a typical mailbox. Many internet
providers require that emails contain attachments no larger than 1MB.
The good news is that you can save it out using the "Save your story for
playback on your computer" - highlight that option then click settings.
Choose the Profile for Computers - 1 (320x240) profile and click ok. Click
next and follow the remaining prompts. Make sure you know where you placed
it on your computer so that you can send it as an attachment.
If you need more help, please post a reply. The above method will not
restrict Photo Story's quality settings and should look sharp like the
preview.