I decided to learn how to model so I started off by making a gun.
Being new to XSI, I made my model much too big...
So I scaled it down to proper size, but strange shadows (for lack of a better word) started to appear near the edges.
It returns back to normal when I scale it back up.
It's hard to describe, so just look at the pictures ->
So my Questions are:
Has anyone experienced these "shadows" before while rescaling?
and if so how might I fix this?

Thank you.

There's nothing really "to fix;"* that's a problem that XSI has rendering your model. While it may look a little goofy, there's nothing wrong with your model.

*Will not assure that it cannot be fixed; it may be able to.

Are you using the Zoom Tool to navigate around your viewports? If you are then the camera has probably moved too far from the object.
Click on your viewport and press R to reset the camera and use the Navigation Tool(hotkey S) to navigate around in your scene instead of using the Zoom Tool.

Another possibility is there could be a duplicate model within the model such as input objects leftover from a merge.

You might also try messing around with the clipping plane distances if neither of the above applies to you.

Use one of the other windows to look in user mode and use that one for a right wireframe window or something.

Thank you, Ace.
I had been using Zoom and that solved the problem.