Color moiré is artificial color banding that can appear in images with repetitive patterns of high spatial frequencies, like fabrics or picket fences. The example on the right is a detail of a shirt captured by the Canon Rebel XT with its excellent kit lens. The usual image wasn’t used because it doesn’t contain a repetitive pattern and because color moiré is difficult to simulate.
Color moiré is the result of aliasing (image energy above the Nyquist frequency) in image sensors that employ Bayer color filter arrays, as explained here. It is affected by lens sharpness, the sensor’s anti-aliasing (lowpass) filter (which softens the image), and demosaicing software. It tends to be worst with the sharpest lenses.