Well, a lot depends on the original size and the compression codec.

I have messed with my budget digital camera, and if I take a high res picture of about 1.5Mb and compress it to a .jpg then expand it back to a .bmp, it does not noticeably lose quality.

Mind you this is a budget camera (2.1megapixels) so the quality is pretty average to begin with. However if your picture size is its uncompressed original size you cannot enlarge it without quality loss as already explained.

Cheers