Unless you blast . out of it there's nowt you can do.

I challenged this problem a while ago by writing to Adobe, I shoot everything in RAW then convert to PSD and finally jpeg to upload, in my process the file is perfectly isolated as the PSD and the jaggies only appear when it gets converted to jpeg.
Adobes reply was that there's nothing you can do and that this will happen every time you have a well defined edge against a blown out background, they suggested that this would not be a problem if the end user just added the threshold for the magic wand up to 1 or 2, they even mentioned that it's a well known issue and that 99% of end users would either know this or quickly figure it out.

iStock is the only site where I have ever had an issue like this and to be honest a lot of the inspectors obviously know this and it's not an issue, but like you every now and then you get the rejections despite the fact it's obviously well isolated.

Three solutions:

Either blast . out of the shot and call it high key!
Resubmit and hope to get one of the better inspectors.
Move on and forget about it.

You're not alone and it's been mentioned by many before, it's unique to microstock and one site in particular, I'll bet no other site rejects them for that reason 

Well no there's a difference between isolated and high key.

What I'm saying is that I think some inspectors see the image for the picture and understand what Bruce said when he told them to find a reason to accept the image when they can, and others maybe don't understand it as much and will reject for any flaws they may find which in some instances can be irrelevant.

Like I pointed out, an image such as the one you described is obviously isolated but has slightly degraded through the jpeg compression which is no fault of yours, it's irrelevant because as I decribed above by simply raising the threshold by one or two will give the isolated result required, an image can be isolated on any colour background, the fact that you've done it on white and at a threshold of 0 it shows some slight jaggies around the edge of the subject is neither here nor there.

Research shows that any serious photo buyer is more concerned about the quality of the subject and how it's lit rather than how 100% perfect the background is, and if you want to be really in depth about the whole isolated issue the majority of macro sites actually advice you to shoot isolated subject on a grey background because it lessers the effect of light spill on the subject.

To remove a well lit subject from a plain background is a piece of cake whether it's white, grey or bright pink.
Some I believe miss this point and would reject a great photo as a result.

The isolated on white paranoa is a microstock thing, in macro it's referred to as a 'cut out' and that's what buyers use to search for.

So basically what I'm saying is that yes it can be annoying but I wouldn't go out of my way to change my workflow just to suit the odd one or two inspectors on iStock.

Oh and isolated is when the subject is uniformly well lit on a plain background so that it can be lifted, high key (although similar to isolated in so much that you want to avoid shadows) is when the subject or whole image deliberately and obviously appears over exposed.

I started shooting people on an isolated white background. Yes, I know it's a great idea and hope not too many people copy me.

I think at least a hundred of photographers already shooting people on an isolated white background. Don't be surprised to see that your idea is already in use.

Just run a soft blur tool around the edges.  That will fix the jaggies.

And yes, I'm having the same issue at IS.

thanks RT,

(where's the duck gone Karin?)