gradual problem

I have a photoshop problem that I can not solve. Neither could anyone I asked.
So the problem is that in the last couple of days whenever I'm using a tool which supposed to create a gradual effect, like gradient or burn, I'm getting either lines or circles instead of nice gradual tones. It kind of looks like if my monitor setting would be thousands instead of millions of colors. We thought that it is only on the monitor, but I've done a test print and it's the same. I'm working on a Powerbook G3 with Mac OS 9.1 and an additional 19 inch monitor. I'm using Photoshop7, but I tried the 6 also and have got the same problem. I have done a clean install, but no luck.
If you have an idea what could be the cause of the problem, please let me know.
Thanks a lot.
:confused:

check all your color settings in PhotoShop
Edit>Color Settings
and make sure all the settings are were u want them to be

ive got mine on web graphics defaults, thats how it was when i installed it