OK, here's a new thought about the screen issue. I have a 16 gig with the screen issue in all its glory. SO, I brought over the 3800 photos I have to the Touch, and scrolling through, they were all exhibiting the problem - except for one batch - which seemed to be working perfectly??!!!!??? I looked at the photos over in iPhoto, and the blacks were kind of washed out on them - quite a bit, actually. Each photo seemed to be over exposed. WHAT IF it's not a screen issue at all, but the algorithm being used to present photos and video on the screen. Rather than being a simple increase/decrease overall brightness correction, which is the only thing a user can do on the iPod, Apple, in a software fix, produces the right curve to correct the problem. Don't take my word for it - go to Photoshop or adjust in iPhoto a sample image that you are used to seeing in negative on the iPod Touch. Roll the blacks back by about 20% and brighten the rest of the photo up by 10-15%. Now bring THAT photo into the Touch and VOILA! No more problem. I predict a software fix in no time. I am willing to bet the screen drivers are messed up and need a curve programmed in to correct the problem. Anyway, everyone try playing around with this a bit and see if you don't find DRAMATIC improvement.