Work in 16bit modes, both in PS and AE.
This video shows how choosing the right color bit depth can often eliminate banding in gradients.
There's more information about color bit depth here.
The Apple Intermediate Codec is a rather poor codec. Why are you using it? It's intended for use in an HDV workflow, and HDV is not much better than standard-definition MPEG-2 in terms of quality, compression artifacts, etc.
In addition to the advice above, better codecs for intermediate work include Quicktime PNG and Animation codecs.
Sometimes a tiny bit of noise applied to a gradient will force the compressor to do a better job.
Thanks for the help guys
I'm not sure why i am using Apple Int Codec, sadly i don't know that much about codecs at the moment. When i add something to the render list AE automatic selects quicktime animation. Maybe i should leave it that way.
I will also try a 16 bit colour depth too, its only one scene in my assignment video, the tutor told me it was banding but not to worry for now.
My normal resolution for uni is 800x600 30fps Square Pixels (1.0)
I also have an HD camcorder (AVCHD) that records in 1440 x 1080 25fps so I imported the footage into Premier Pro and decided I wanted it half the size, so i told media encoder to encode it as 720 x 540 but in order to keep the "output" tab monitor the same aspect ratio I had to select HD anamorphic (1080) instead of Square Pixels (1.0)
When i played it through quicktime it was looking good, but when i imported it into AE and dragged the footage onto the 'Comp' button the footage was all stretched upwards, so when i went to comp settings, the resolution was 720 x 540 but i had to change it to 950 x 540 in order for it to look right.
Has anyone any ideas where i am going wrong?