The subject appearance, often called pixilated, occurs if the client display is set for 256 colors (8-bit), because OneNote 2003 is optimized for a 16-bit color depth, or greater.
NOTE: OneNote 2003 menus and tabs use gradients to shade one color into another, and gradients cannot be displayed at an 8-bit color depth.
To workaround this issue, increase the color resolution of the Terminal Server client:
1. Open the Remote Desktop Connection item from Start / All Programs / Accessories / Communications.
2. Type the computer name or IP address of the Terminal Server into Computer.
3. Press Options to expand the connection window.
4. Select the Display tab.
5. Select a color resolution of 16-bit or higher.
6. Press Connect and log on to the Terminal Server session.