Rich,
I am absolutely sure that the 1/4" gaps are due to backlash compensation. Here's that file. If you want to, run it once with BC on and once with it off. I would be interested to see if you get the same results.
As for the banding, I fixed a farly significant "hardware" issue last night which brought my backlash down considerably. X=0.003, Y=0.001, Z=0. I'm going to try the face file again this morning with BC off.
Thanks for your help, guys!