Are you using an LCD? If so, is WoW's resolution set the same as the LCD's resolution?
I know it definitely looks funky when I run, for example, a game at 1024x768 on a 1280x1024 LCD. But screenshots look normal as it's only the display of the image that's funky not the image itself. The LCD is having to do some averaging when displaying pixels because there isn't a 1 to 1 relationship.
If you are running a CRT it's something else though.