Long story short - my saga with Apple over the phone to replace my W.37 Touch was entering its 2nd week of "it'll ship in 3 days...until the next time you call, then it resets to 3 days from then." Getting sick of this after my 4th or 5th call, I asked the phone rep to call my local store & have them hold a replacement. Of course, this turned out to be another Week 37 (but w./Macy Gray), which I insisted on testing. Even with the (stock!) 1.1.1 firmware, I could definitely see problems with the blacks. My "smell test": does it look better if you tip back & to the left? Then the screen's bad. I told them I couldn't accept it, and did they have any Week 38s? They had 1 (among a big batch of 37s - I actually asked for a Wk. 39). Unboxed that - first they said "if you don't like this one, we'll have to give you a full refund, since we can't open every one." The Wk. 38 was better but not great, on the meager fare that the store iTunes could provide, and didn't seem to handle friend Jay-Z well. At home, loaded up some video I'd had problems with, and tried the "smell test" again: no dice. Not as bad as my Wk.37 w./1.1 firmware, but not great - and back-left tilt revealed much more detail, both on video and on Jay-Z. I'm so wracked with uncertainty as to "am I just holding it wrong" that I put the Touch on top of a flat dresser & backed it with the box, so it would be guaranteed level (vertically), then looked at it head-on. It's not AS bad, but still far from great or acceptable. So, back it goes - I'm going to do one last try with Apple (phone) for their promised refund. Hope it's a Wk. 40, at this rate. If not, I'm going to take up the Store for their generous offer of a full refund, no restock fee. Two other observations: -Auto-brightness definitely works on the Wk. 38/1.1.1. It registers whenever you change modes at all, even if a paused video dims & then resumes. This may be a firmware or hardware fix. -Maybe it's the 1.1.1, but video that looked great (other than blacks) on my Wk.37 looks like absolute artifacted crap on the Wk. 38. Plus, everything is more washed out (yay hardware crutch!). Thanks to my local Apple Store staff for their patience in unboxing not one but two replacement Touches, then still offering me a full refund, no restock if I wasn't satisfied.