Any suggestions on how to reduce color banding around suns and in nebulas? (nebulae?)

not sure ..check if you are in 32 bit mode, maybe disable texture compression and enable glow

that's all I can think of..

Are you sure your monitor can handle 24-bit color?

Definitely check that you don't have Texture Compression enabled, and aren't using a 16bit videomode, as mentioned above.

Aside from that, it can also be videocard and driver dependent.

it would help a lot if you gave us an idea of your configuration like hardware info and operating system.