I used to have this "banding" effect when there were transmission errors: too high baudrate with software serial, or also when I was not transferring correctly the picture; in order to do it correctly you must read and store in RAM a chunk (size is not critical, but IIRC it must be a multiple of 8 bytes). Then you transfer the whole chunk. In brief do not read on serial one byte and write it directly, it seems to confuse the hardware.
You can have a loook at how it is done in my library.
HTH