Dick,
Thanks for your cheap & dirty trick for checking for dithering issues.
It worked like a champ, I mean that your script revealed I don't have a dithering problem. But I did discover what my problem was, It appears the needle file I was capturing was to big, and my mouse move was not hitting the correct location, so after resizing it it seems to be working now.
Thanks to "all" for taking time to help.
gchichester
PS.
Remember I'm still a newbie so most likely I'll be back with more questions!