Ok in that case I kind of take my comment back... :L As much as I encourage modifying others code, I think you should include credit to the original author

Is it generating terrain on the fly or pre-generating a set width of terrain. If the latter option, does it repeat once it reaches the set width or does it just end? Just wondering because the one time I made a terrain generator (inspired by @nccb's one) I had it generating on the fly, but I'd be interested to see what method you've gone for. Oh and finally, are you using Graphics2d's gradient fill method?

Oh and a point to note -> My fading is currently faster, however you can slow it down if need be with ease (just change the 0.95's in fade() to a number between that's between 0.95 and 1 exclusive (1 causes no fading)).

http://www.greenfoot.org/scenarios/4567 There you go. I've implemented my v4 color rotation system and various other updates. Also the main problem was that you had something like new Color(r, b, g); as opposed to (r, g, b) so they'd flip constantly