Op, in biological terms, do you know what a retina is?
Apparently it's a "light-sensitive tissue lining the inner surface of the eye" but I think it's something that only your eye can see. It's like the phone shoots electrical impulses into your eyeballs..
Digital is bad, you want it to NOT look digital. High pixels and high contrast (in each base color) contribute to quality digital displays and the "3D" look. That's on any screen.
It kind of reminds me of this a little bit, except imagine that on a home screen. With a lot more glitter. http://www.moillusions.com/2006/08/stereo-dino-optical-illusion.html
The "glitter" term explains the stunning detail, the pixel density is so high- your eyes can't take it!
To me retina is like a double rainbow...... It's so beautiful it makes me cry.
Seriously tho, if you see something "below" the screen, it's likely the capacitive matrix under the touch screen.
They say that the resolution of the human retina is actually higher than claimed by Apple. Which I believe. If you have [better than 20/20] eyesight, then at one foot away the iPhone 4’s pixels are resolved. The picture will look pixellated. If you have average eyesight, the picture will look just fine.
But it looks electrical- it looks like it has a texture.