What you've heard about Sean is the way a standard CCD will extrapolate colors using the RGB array that is laid out in a checkerboard pattern. In order for each pixel to have it's own color the processor will extrapolate from the surrounding pixels what it thinks the "right" color for that spot will be. You can get some wierd effects with fine patterns that fall in a harmonic range of this extrapolation.
There is one digi camera out now that doesn't do that, the Sigma SD-9. It uses the Foveon X3 image sensor in which the photodetectors are layered in a similar fashion to color film. The results are much sharper and truer colors. In my opinion this is the only digital imaging system that has a chance in hell of really competing with film for image quality. Keep your eye on any system using layered photodetectors, they may be the ones that come out on top of all the other digi-junk.