The best is a 24-bit image, of course. Anything works, but the color range of a 24-bit will beat the tar out of a 16 color any day. Exceptions would be objects with a few discrete colors, like a red, white, and blue flag. Then a 24-bit and a 4 color image are equal in quality. Note that Imagine converts them all to 24-bit internally, though- the memory goes down equally for a 100 by 100 4-color as it does for a 100 by 100 24-bit.
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