I dunno if this has been done yet. But this is for better quality images that have pixels that can be very noticeable.
Lets take this picture of Nerine for Shuffle!
See it is a bit blurry? And Don't mind the small size of it
Ok now I use the magic wand since this is just plain white background. I extracted the bg and this is what it looks like now
Ok now I duplicate the layer. Now I go to Filter-Noise-Median 5px
Now click Layer Style-Blending Options-Soft Light
You should then get this
See? it is alot better quality.
Now if there is still some nosey pixels, select the bottom layer and go Blur-Smart Blur- Any Radius and Threshold you want
You just keep choosing what the Radius is, the Threshold then you want it high or low quality.
When you finish that go to Layers-Merge Visible
Also another tip I save my extracted backgrounds in PNG. format
Now for the final result
Mind You it is a bit messy