The palette displays all the colors in the active palette for the current image, which include but are not limited to the colors used to represent the reduced image. The image might use only a subset of the colors in the palette, and this information is indicated in the Colors Used/Colors Unused display above the Palette Menu.
If you are viewing the reduced image, transparent colors may be selected via the palette. Clicking on the palette automatically turns on transparent color capabilities. A new transparent color may be selected by clicking on one of the colors in the palette. A click on a color while holding down the Shift key adds the color to the Transparent Range but does not change the current transparent color index, and a click on a color while holding down the Apple/Option key subtracts that color from the Transparent Range but does not change the current transparent color index. On export, all colors within the Transparent Range are converted to the transparent color index and set to transparent.
Note that if the Transparent Color Swatch is selected, transparent colors can also be selected via the Preview.
The Transparent Color check box indicates if the exported GIF will have a transparent color. If it is on, the Transparent Color Swatch displays the current transparent color next to the corresponding index of that color in the palette. On export, all pixels of all transparent colors in the Transparent Range are converted to this index. You can select this color by clicking or dragging in the Palette or, if the Transparent Color swatch is selected, the Preview.
The Transparent Range check box turns on the automatic selection of a range of colors to be set to transparent. The selected range of colors is determined by the current transparent index and the range strength. The range strength can be adjusted with the up/down arrows. A higher range strength will select more colors similar to a given transparent index than a lower range strength.
The range can also be chosen manually. Colors can be added to the range by holding down the Shift key while clicking on colors in the palette or, if the Transparent Color Swatch is selected, the Preview. Colors can be subtracted by holding down the Apple/Option key while clicking on colors in the palette or, if the Transparent Color Swatch is selected, the Preview. Note that turning off the Transparent Range check box does not clear the current selected range of colors. To clear the range, turn off the Transparent Range check box and click on the color you wish to set to transparent in the palette or, if the Transparent Swatch is selected, the Preview.
Note: the transparency options only affect GIF output. If you select Apply in the filter version, the transparent range will not be compressed into a single color in the RGB image.