@NiLuJe, Thank you for the effort you must have put into the above post. I'd love to say I understood it all but I'd be lying
However, I did what I should have done in the first place which is to use your original colour cover on a test epub and sent it to my H2O and I did discover something quite interesting (at least to me

).
Loading the same epub with the same cover into calibre as 2 separate books, I sent both books to the H2O with the KOBOTOUCH driver config'd 2 different ways:
- Upload covers: CHECK
Upload Black/White covers: CHECK
Keep cover aspect ratio: UNCHECK
- Upload covers CHECK
Upload Black/White covers: CHECK
Keep cover aspect ratio CHECK
Option 1 (cover stretched to fully fit) is my normal choice (practically a hanging offence, I know

), but the great thing is that the 'banding' on the sleep/poweroff screen seems to be much less with option 1 than with option 2. Why that should be I'm not sure, but it explains why it hasn't really bothered me so far. Of course the epub page 1 rendering of the coloured cover still has ugly banding so I just quickly turn the page and forget about that.