Textures loading strange

[DeadEli]

I'm not entirely sure what the issue is, but I am trying to load textures with SOIL and OpenGL, and when it displays them, there is basically an off-white half transparent line on the edges of the image next to the completely transparent sections. Also the pictures do not come out incredibly clear. Is there a way I can increase the resolution or something?
here is how I load textures:
GLuint Texture = SOIL_load_OGL_texture ("image.png", SOIL_LOAD_AUTO, SOIL_CREATE_NEW_ID, SOIL_FLAG_MIPMAPS | SOIL_FLAG_INVERT_Y | SOIL_FLAG_NTSC_SAFE_RGB | SOIL_FLAG_COMPRESS_TO_DXT);
here is how I display it:

glBindTexture(GL_TEXTURE_2D, Texture);
glBegin (GL_QUADS);
glColor3f (1.0f, 1.0f, 1.0f);
glTexCoord2f (0, 0);
glVertex2f (1, 1);
glTexCoord2f (0, 1);
glVertex2f (1, 2);
glTexCoord2f (1, 1);
glVertex2f (2, 2);
glTexCoord2f (1, 0);
glVertex2f (2, 1);
glEnd ();

Any ideas?

[DeadEli]

Would this issue be due to SOIL or OpenGL? Does anyone know?

[DeadEli]

I commented out SOIL_FLAG_MIPMAPS and now it is significantly better. Why would that happen? What does this command do?