There are two possible reasons for this. The first is that you're
running at 16bpp and have hit this bug 423632, another is that you're
using cheap LCD's which only support 18bit color
http://en.wikipedia.org/wiki/Color_depth#LCD_displays .

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[karmic] boot and gdm "wallpaper" is too low color
https://bugs.launchpad.net/bugs/441210
You received this bug notification because you are a member of Ubuntu
Desktop Bugs, which is subscribed to gdm in ubuntu.

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