It's perfectly fine for a 16bit framebuffer, which is most likely what you are using. If you want smoother gradiants, use 32bit instead (not sure if this is possible for a wallpaper, because i don't know how the color depth of the home screen is handled). However, this usually isn't an issue, because you normally have textures and stuff and you don't show a single tea pot that shades from light to darker grey.