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Upgraded to CS5.
Vector based graphics are not rendering smoothly within Illustrator or when exported.
Attached is a raster graphic showing how poorly AI is rendering.
I do have Anti-Alias turned activated.
The arc by Paint.net looks more jagged. Is that the problem you are talking about? Maybe you could explain the graphic a bit more, for example what the text is indicating.
Hmm, just taking a stab in the dark here. Because like Luma pointed out, your description of the problem isn't terribly clear.
For example, the circle labelled "Illustrator" looks mighty clear to me.
Assuming that the two circles are from different ai files, the jagged file might have have View > Pixel Preview turned on.
And to make it render more smoothly when it's exported, when setting up a New Document, "Align New Objects to Pixel Grid" (under Advanced options) should be checked.
Anti-alias should always be turned on, unless you're using bitmap fonts or something.
Hope this helps.