I'm on my second new 20" iMac, both with the same display issues: a pronounced gradation from top to bottom, dark to light. The first one was considered DOA and returned. I thought it too much of a coincidence that 2 would have the same issue, so began researching. Many posts say the 20" uses a TN display, which is only 6 bit and uses software interpolation to display colors. Apple claims both the 20" and the 24"use TFT active-matrix LCDs, with slight differences in the brightness and contrast ratios.
The product specialist at Apple kept repeating that the gradation is "within acceptable range" for the product, but would not clarify what that range is. He did not have any other useful recommendations or solutions. The issue has been escalated to an engineer.
Has anyone else encountered this issue? I find it impossible to work because the screen is so unreliable. They claim it's a "consumer level product". I am using it in a professional office, but I wouldn't even want to make my family photo album in iPhoto on it.