So heres the situation in brief.

Ps3 connected to both Westinghouse 24" tv/monitor and 42" Sharp Aquos w/high quality Sony Ps3 HDMI cable in all resolutions has severe color banding on both TV's. Also when watching blu-ray or upscaled dvds, color banding, and a whole host of image problems.

With component no noticeable banding or other issues in any resolutions.

I have an upscaling DVD player w/HDMI and on the same TVs it plays at 1080p over HDMI fine with no color banding.

Ps3 issue or TV issue?

If you were in my shoes would you return the Ps3(early model) and hope its some compatibility problem that is cleared up in later revisions?