The splotchies have been plaguing Apple's 23" aluminum displays since they came out. Still has yet to be corrected. Take it back until you get one you're 100% satisfied with.

As for the sleep button, not sure why its not respecting your setting in the Displays preferences panel. Try toggling to something else, closing the System Preferences window, and resetting back to how you want it. You could also try trashing the Displays prefs.