Hi ironsightdesign, if you can please post an example file I might be able to give you some more detailed information and it would help me to understand the issue and think about what might be done about it.

But in the screenshot you showed above: http://moi3d.com/forum/index.php?webtag=MOI&msg=9458.3 that level of banding should definitely not be seen in a rendering with vertex normals being used.

If you're transforming the objects it could be possible that the vertex normals are being discarded.

It's hard to say anything with certainty without an example to test with over here.

- Michael