Congratulations for considering the K10D
I'm very happy with this camera and wrote a Pentax K10D User Review
Answering more specifically to your questions,
1. Are your JPEG images as sharp and colorful as standard when you change the setting on the camera? I know at default setting the camera lacks.
Actually, I changed my *ist DL for a K10D because the *ist DL produced over-saturated colours.
With the K10D, I always use the standard mode. I don't like the bright mode which seems to punchy for me. Anyway, that's a matter of taste
The best answer comes with shooting in RAW mode (or in combined JPEG + RAW mode): have look here
with full red pictures
You have also the possibility to use bracketing for saturation: you shoot once but the camera records three pictures with different saturation settings. Jsut amazing
2. Has anyone had trouble with the LCD display on top of the camera? My old point and shoot had a display on top, and it went dark after about one year.
Personnaly, I've no problem with the LCD and my K10D is 9 months old now.
Which lenses do you consider
Pentax K-5 + BG4 + DA* 16-50 + DA* 50-135 + DA* 60-250 + AF-540FGZreivilophotography.weebly.com