40d possible picture viewer problem?

as i was playing with my 40d i notice that when i take a picture of a single high contrast item (in my case bright red color) and view them on my on camera lcd screen i notice that the top edge of the red subject became very jagged almost like pixilated. this was not the case if i downloaded this onto my computer and viewed them, so that rules out the problem being the picture.

here is a picture that i took

HTTP response: NOT FOUND | MIME changed to 'image/png'

The preview window only uses a low resolution jpg thumbnail image to view on the back. It's not for seeing how good the image color is or anything else for that matter. One of the reasons I only use it to view the Histogram or otherwise ignore it.

Not only that, but the resolution of the screen is quite wimpy, something like 320 by 240.