I think this question is about web icons. I've tried giving an icon at 512x512, and on the iPhone 4 simulator it looks great (in the preview) however, when added to the home-screen it's badly pixelated.
On the good side, if you use a larger icon on the iPad (still with my 512x512 test) it does seem to come out in better quality on the iPad. Hopefully the iPhone 4 rendering is a bug.
I've opened a bug about this on radar.
EDIT:
I'm currently using a 114x114 icon in hopes that it'll look good on the iPhone 4 when it is released. If the iPhone 4 still has a bug when it comes out, I'm going to optimize the icon for the iPad (crisp and no resize at 72x72), and then let it scale down for old iPhones.