Is my sony ericsson naite broken?

Ivo

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Every photo taken with my brand new sony ericsson naite has this weird effect as if the image is in a 256 colours format. I looked through all settings and i couldn't find any solution. Should i return it and get a new one or is it a software issue which is fixable?

here is a sample photo http://picasaweb.google.com/ivchomalkiqa/DropBox#5531761722707089458
 
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