Re: monitor problem!!
1. Make sure your Display settings are set to the highest color for your Graphics Card. Should be 32bit for most cards.
2. You can make gradients in an 8 bit image, but it always helps if you add a little noise to help remove banding. I usually add 0.5 gaussian and then fade a little if necessary.
3. Creating a gradient in 16bit is overkill for most images unless your entire workflow is in 16bit. When you downsize to 8 bit you may still have the same problem.
3. IF you are printing it is always best to create the gradient in the final color space to avoid banding.