@schtruck,a color banding shader is very neat but it is good to know that dithering does not only remove color banding but it also applies some kind of shading on some textures and make some graphical effects much more visible(like the cloud in FF8,there is another comparison pic that I will be posting)
While you are at it,I also suggest adding a dither blending shader.As I have posted somewhere,Crt monitors using ables such as the composite cable blends the dithering that are produced in psx games eliminating the patterns of dithering.Once proper dithering is implemented in Fpse,this kind of shader will output the graphics that are the same as how it is intended to look like.
Here are some pics that show what I am talking about(these are not the best examples but it will at least give you an idea)
Note that filtering is off for a more clearer comparison
This Is a shot of Final Fantasy IX on FPSE.The ground looks grainy(I turned off filtering).
fpse shot.png (55.32 KiB) Viewed 4248 times
This is Final Fantasy IX with proper dithering applied.This is how Final Fantasy IX would look like if you play it on a psx/ps2/ps3 plugged in an Lcd monitor.It does not only make the colors much better,it also somewhat applies some kind of shading on the sky and ground making it smoother having less pixellation and graininess.Some people might find it ugly though because of the dither patterns
dither.png (55.68 KiB) Viewed 4248 times
THis is Final Fantasy IX with dithering appiled and a shader that blends the dithering.This attempts to replicate how FFIX would look like if you play it on a psx plugged in a CRT monitor with a composite cable.Most dither patterns are now blended together making it look better than the prev. picture.Because of this,there is a filtered look on the ground and sky reducing the pixellation and graininess making the overall grapics better(it's still different from proper texture filtering) Note that filtering is still off,the game is still in low res and the screenshot does not use opengl or directx graphics
dither with blending.png (98.56 KiB) Viewed 4248 times
Here is another final fantasy VIII comparison but this time using software mode in high resolution(2x)
This is fpse with software mode on high resolution.The clouds are barely viewable and there is some color banding present
fpse hi res.png (39.85 KiB) Viewed 4248 times
This is Final fantasy VIII with software mode on high resolution and with dithering.The clouds look like proper clouds now and the color banding is gone.Since this is is high resolution,the dither patterns are smaller and finer