Rainbow effect
 

The display on my Nokia 770 is giving me a rainbow effect -- something as if pixie dust were put on the display. Can you guys help?

I think that is normal, depending on your light source. There is interference between the pixel matrix and the touch screen foil. On mine, it is very noticeable if a bright light is shining on the display, but not in a more subdued light.

I think it has to do with the number of the representable colors. This effect appears mostly in the case of truecolor gradient.