Hi,
There have been a few threads describing the issue in the past.
Some of these users find that hitting the sleep button twice resolves the issue temporarily as it resets the display by turning it off and on, others find that this does nothing.
Some users even find that the display then runs opposite to the W-B setting in Accessibility.
It sounds to me like a failed display driver chip or possibly a loose connection as it tends to start intermittently and gets worse over time.
It doesn't appear to be iOS version related as the threads carry over from v3.x.x to 4.x.x
Here is one other thread as an example
http://discussions.apple.com/thread.jspa?threadID=2305114
If out of warranty, maybe take it to a repair shop for them to open it and make sure it not just a loose connection.