1. My first iPhone 4, failed to accept the first firmware/software release that Apple released; and, even the Apple Geniuses couldn't get it to do so. Therefore, within minutes of my taking it to the local Apple Store, they exchanged it for a new one, at no cost to me.
2. The iPhone 4, I returned yesterday (19 Jan 2011), and was similarly given a new replacement iPhone 4 for, had similar problems as you say with color casts. All the Apple store geniuses had to do, was to log onto iTunes store and Apple online site to see that all the icons/pictures were fuzzy/unclear/faded/ had horizontal streaks running though images & across my phone's display, to realize something wasn't working right; and, especially, after they restored the phone back to factory standards, and still had the same problems.
3. This problem with my second iPhone has been a problem for months; but, as the phone otherwise worked just fine, I just never took the time to return it to the Apple Store for a check out. In fact, the main reason I finally did so yesterday, is because I now use my iPhone for taking/storing/analyzing Blood Pressure measurements, and as a result a number of doctors/nurses/laboratory personnel and others have been interested in checking this application out ----- this was reason enough for me to get the iPhone's display looked into, and yes now it's just fine. Of course, my iPad can be used for the same purpose (even an iPod Touch for those with them), but the iPhone is something that those of us that have one, tend to have with us at all times.
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BRJR ....(LOL, some of us are quite satisfied as Hobbyists ..)
What faulty operation?
My iPhone 4 has been fine, but we thought that my cousin's might require a replacement since it took pictures with a rather off cast in color.
Turns out that she had never updated from ios4.1to 4.2.1. Apparently, she is a PC user and at&t sent her out of the store and never told her to install iTunes on her laptop for syncing, backup and music loading purposes!
My local apple store was able to update her phone to the latest iOS, and in the process, fixed the color issue with the built-in camera. Now that she's back home on the other coast, I still don't know if she's installed iTunes on her laptop