I\'m building an \"Optical Character Recognition\" system.
so far the system is capable to identify licence plates in good quality without any noise.
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It looks like your question has been more or less answered already (see d00b's comment); however, here are a few basic image processing tips that might help you here.
First, you could try a simple imadjust. This simply maps the pixel intensities to a "better" value, which often increases the contrast (making it easier to view/read). I have had a lot of success with it in my work. It is easy to use too! I think its worth a shot.
Also, this looks promising if you simply want a higher resolution image.
Enjoy the "pleasure" of image-processing in MATLAB!
Good luck,
tylerthemiler
P.S. If you are flattening the image to binary tho, you are most likely ruining the image to start with, so don't do that if you can avoid it!