Correcting/Optimizing Color for HTC G1

I posted this picture in a thread, stating I made it for my phone. Well, I put the file on the SD card, then set it as wallpaper.

First of all, the color was not right. The blue I used (#30587c) was much brighter (something similar to #1187f2). Then the gradient I used looked choppy on my phone, instead of smooth like the original picture.

Here's what it looked like on my phone:



Anyone know how to adjust the colors in Photoshop so it will turn out correctly? I have used the correct resolution, 8bit RGB (the phone is 16 bit, maybe that could be it?) and did not embed the color profile within the JPEG.

As a side note, it did this with a larger resolution as well. I do not know why it is doing this, I have never had a problem with gradients or getting the correct color from pictures on my G1. Even a resolution of 1280 x 800 would be perfect, including all the little details. So I'm pretty stumped at the moment.

I'm going to try and use web safe colors, see if that's the problem (just to try things out).

Thanks for any input.