I have downloaded some channel logos and used Photoshop to convert them to 4 bit grayscale bitmaps but when I put them on my Neo they didnt show up very good. Ive already worked out that they look better if I swap the pressed and normal states but I still expected better. Is there a trick to making them look right or have I just done something wrong?

depends what you mean by looking bad...if they are very detailed and small it will be tough to see them clearly. The ones I used were easy enough to see....I just had to make sure they were large enough. You could also try playing with the contrast on the remote. That helped with some of my buttons.

Try using logo's with high contrast. If the background is almost the same color as the logo, change it!
You can optimize the bitmap you made in photoshop using Microsoft Paint at maximum size.
If you have trouble finding good logo's, try

http://www.lyngsat-logo.com/