I don't know if it's "normal" but it's definitely not acceptable. I recently put one on mine (I'll post some pictures later when I have time) and have a number of issues but the color banding is probably the worst and if it's considered normal there's probably no point in buying or requesting a replacement. It's definitely not just visible with the phone off.
What I've found is its visibility is very dependent on the type of lighting. It's not visible with no external lighting and it's either not visible or only barely visible with natural or tungsten lighting. However, under fluorescent lighting (both CFL and traditional office fluorescent tubes) it's very noticeable. Even under mixed lighting it can be very visible if fluorescent is part of the mix. At my office I get a fair bit of natural light from the window but it's mixed with fluorescent light from the ceiling and the banding patterns are visible to the point of distraction. Under CFL lighting at home at night they practically obscure the display.
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