I'm trying to figure out how to use 32bit color display mode but still use something like an 8bit 256 color palette (or better 1024 color palette) so I can set very precise color gradients and do palette rotations and other effects with them.

[ie: 16 color shade gradients like for example: black to red, black to blue, black to yellow, ...... blue to white, brown to yellow, etc...]

My best guess so far is to use a shader to pick the closest colors - and perhaps have them calculate a color to match to based on how the original color gradients would be calculated. I want to do this to avoid white-washing, burn-outs and other color destroying artifacts from some other shader layers -- also I want it to look somewhat retro too (like Sega Genesis retro).

Also I was hoping to do some palette swapping and rotation effects.

Anyway, all ideas - abstract, beginner or otherwise - are totally welcome. (^_^)

Save your palett-color-index encoded into 16bit texture (up to 65536 colors), then use this color/256... color/64 to index into a 1D texture containing the final color (->shader).

Wow, that's brilliant. I'm gonna try it. :D