When setting up certain wallpapers it takes away alot of colors from the picture and makes it looks shitty when you have to crop.
I haven't noticed this myself, but I am certain it has a lot more to do with the quality and type of the source image than with Android or the screen.
No it has something to do with the way it crops the pictures, because when i look at the picture in gallery its fine even under full zoom, as soon as i crop it, the colors turn to crap especially if there is ALOT of gradient
I do the cropping on the computer (640*480) and increase the cropping square to the whole image - no crop needed and a beautiful wallpaper.
Thats what i mean when i crop or spread the box for the "whole" to be used, Its a wallpaper designed for android 640x480, sorry for any confusion.
The built-in app that sets the wallpaper does resave the wallpaper even if it's the same res as the screen. I use wallpapper set and save from the market. It's free and does the job. Cyrket - Wallpaper Set And Save