I had the exact same thing happen to my where a yellowish, kinda brownish discoloration on my screen. mine was located in the bottom left corner about an inch long and a quater inch wide. stil have no answer to y it happend but i calld customer support @ 800-myiphone or whatever the number is. when i got on the fone with them i automaticly told them i knew it wasnt a software problem after i described the situation to them and told them i was pretty sure and figured it was a hardware problem, like the screen. so then i told em i basicly wantd to send it in to check it out and they scheduled my a loaner ifone i paid for to b sent to me. got my loaner fone, sent mine to them and like 3 days later i think got me a new one sent to me replacing my old one. sent the loaner fone back. dun deal. they never did send me any info telln me the problem just that it was replaced. btw i could only really c the discoloration when my fone was off like described by another poster, but when i had it on, like in safari, i could definately tell it was there but it had a white-ish color to it and if i lookd at it at an angle i could c the yellowish, brownish color a little. hope this helps u.