I have successfully built a mosaic dataset based on county wide NAIP images. However, when I zoom in below 60,000, the resolution is very poor.
I originally thought it was an issue with the quality of the overviews, so I goofed w/ the Define Overview Tool settings (a whole lot). Then I realized that at some point the overviews should not be displaying, but the source data should be visible, at least from my understanding, see graphic in ArcGIS online help ( http://help.arcgis.com/en/arcgisdesktop/10.0/help/index.html#//009t00000040000000 ). So I think what the problem is, is that the overviews are always visible and not switching to source data, which is resulting in poor quality at large scales. Not sure if this is what is actually happening or not. I have successfully built another mosaic dataset on another set of imagery with no image quality problems at any scale. Successful dataset was built using MrSID images of consistent smaller tile sizes. Unsuccessful dataset was built using NAIP imagery, files are jp2, and they are county wide, so they cover a very large area per "tile" vs the MrSID files. See screen shots for comparison below.
The main differences between the 2 mosaiced datasets are different file types (MrSID and jp2), physical coverage area of a single file/tile, and NAIP mosaiced dataset utilizies seamlines to mask out unwanted parts of the image.
In screen shots both mosaic'd datasets are shown. scn1 is an overall, NAIP are large irregular images on the perimeter for the most part, MrSID mosaic dataset is NE smaller footprints in green. scrn 2 is at 60,000 you start to see pixelation but not too bad. scrn3 is at 12,000 with side by side, left is original jp2 nice quality, right is mosaic dataset not so nice quality.
Mike, not sure if you got this sorted out, but the same thing happened to me.
The issue for me had to do with the MinPS field not being set right on the overviews. The MinPS for each overview level should be equal to the MaxPS of the level before it. For some reason some of my highest-resolution (Level 1) overviews had 0 as their MinPS, while others had the correct value. When I fixed this everything showed up at the correct level.
