I wrote:
The problem that svg-images appear pixeld in PDF or DVI-output was a problem of Imagemagick that is now fixed. But now the svg-images appear horribly inside LyX. The problem is the conversion from svg to ppm.
The problem is that LyX can only display 8-bit PPMs (why?) and I got rid of the "-depth 8" option in convertDefault.sh. I'll revert this and send a corrected patch to bug
http://bugzilla.lyx.org/show_bug.cgi?id=2418 Could we get rid of the 8 bit restriction for PPM? regards Uwe