The default output format for MapServer is 8bit pseudo-colored PNG or GIF. Inherently there will be some color degredation in converting a 24bit image (16 million colors) image into 8bit (256 colors).

But in order to ensure fast rendering MapServer uses quite a simple method to do the transformation, converting pixels to the nearest color in a 175 color colorcube. This will usually result in blotchy color in a fairly smoothly varying image.

Solutions include:

• Select 24bit output. This might be as easy as "IMAGETYPE JPEG" in your MAP section.
• Enable dithering (PROCESSING "DITHER=YES") to produce a better color appearance.
• Preprocess your image to 8bit before using it in MapServer with an external application like the GDAL rgb2pct.py script.

For more information review the Raster HOWTO document.