Applications need to be 'retina aware' to actually get the full resolution, otherwise they are told the resolution is 1440x900 (this doesn't include fonts, and other system-rendered features, which the OS can always render at full resolution). The program icons also need to be shipped in a higher resolution.

More pixels..? Apps that aren't updated are pixel doubled, so images, and in some cases text, are jaggy and blurry until they're updated.

I'm not sure, but the entire application looks pixelated and blurry, like it's rendered at half-size and scaled up. It's really bizarre.

Apple does something called pixel doubling. If an application takes no action, it won't just be rendered smaller. Instead, Apple zooms the whole app, causing everything to get very fuzzy.