The Nexus One's display continues to be less than meets the eye. Ars' breakdown reveals that the PenTile subpixel arrangement means that, depending on how you count the pixels, it could have an effective resolution that's smaller than 800x480.
Nouvoyance's own diagram of the PenTile subpixel arrangement explains it pretty well: it uses a third fewer subpixels per pixel. Specifically each pixel has one green subpixel, and one double-wide red or blue subpixel, so what you end up with, says Ars, is that "half the red and half the blue spatial information in the 2D image being sent to the display is simply thrown away or spread to the nearest matching subpixel by a convolution or intensity-dispersion process."
Which is why text on the screen doesn't look quite as sharp as the Droid's and you wind up with the odd colour banding with certain images. Ars has more tests you can try on your own Nexus One using greyscale patterns to show some of the funkiness going on. All that said, there's no reason to dump your Nexus One - you might not notice, or even care, as many haven't. Even we thought the screen looked great in our review. But it's still a pretty fascinating dive on the Nexus One screen tech that's worth reading: [Ars