The Nexus One's Dirty Display Secret - Page 2 - xda-developers
Load this image in the browser:
http://www.nasa.gov/images/content/154221main_20060807_PIA07997_060802183716.jpg
You will probably see banding, but it will disappear when you scroll or touch the screen. When you let go it will come back.
As rotohammer explains over at xda: " If I use this picture
http://photos.upi.com/slideshow/lbox/7fc13f2a01438c144c13596ef3adaca2/MARS-ROVER.jpg, Which is at 800x616 pixels, I don't see the banding.
That tells me its the scaling algorithm in the OS, app or GL library thats causing the stepped gradient, not the AMOLED display itself."
I think this is the answer folks. Thanks for all the comments!