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Is the color picture quality really that noticable between the two?
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Yes, especially if you are looking to produce quality reproductions of photos on premium, glossy paper.
HP makes inkjet printers that allow you to replace the black cartridge with a ‘photo’ cartridge. This is a three color cartridge, which combined with the three-color cartridge, gives 6-color printing: cyan, magenta, yellow, light cyan, light magenta and black. This is because it is a bit harder for the inkjets to reproduce the lighter tones. Canon makes inkjet printers that also allows replacing the standard cartridges with ‘photo’ cartridges. In this case you get 8-color printing: magenta, light magenta, cyan, light cyan, yellow, light yellow, black and gray.
Both the HPs and the Canons print slowly when reproducing high resolution color. However when just printing black text they are fast enough (at least for me) at around 15–20 ppm in ‘normal’ and a bit faster in ‘draft’—which is what I use most of the time.
If you are considering quality photo reproduction, I really urge you to check out the inkjets.