If the source image bigger than the resulting size, Google Maps will not scale it correctly.  However, it will scale to a larger size.

So let's say 'theimage.jpg' is 50x50:

//This will NOT scale in IE

var useImage = new google.maps.MarkerImage('theimage.jpg',
				  null,
				  null,
				  null,
				  new google.maps.Size(25, 25));

//This WILL scale in IE

var useImage = new google.maps.MarkerImage('theimage.jpg',
				  null,
				  null,
				  null,
				  new google.maps.Size(100, 100));