Well, the thing is depending on to which type you adhere, you either have only 256, or you have way more colours to use but have to stick to only using 256 at one time. The only thing I don't know is, which colours you are limited to on that second "mode" to pick for the pallete O:
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DragonDenton
Those colours and style of shading make me think so much of DOS era VGA graphics :D