The problem: When you look closely, diagonal lines in your image look blocky, with "staircase" edges.
The solution to this problem (other than going out and buying a video system that doesn't use square pixels) is to blur the colors along the stair-steps a little, to soften the jagged edges. This is what anti-aliasing does.
Look for the latest release of antialias under the antialias module of the download page. Big changes in the 0.8.0 release are the addition of a preview in RGB mode, and a fix for the segfault-with-selection bug. The changes to 0.8.1 aren't nearly as exciting, but you may need it if you're using the latest version of GIMP 1.1.x.
Want to contribute some code? There are a variety of open tasks left to be completed on the plug-in tasks list.
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