Reducing the Number of Colors

How many colors do you need?
One of the primary reasons for the multiple number of file formats is because the multiple number of methods of file compression. A relatively small image such as the one below is a whopping 271k. One of the main methods of file compression for pictures involves reducing the total number of colors. As mentioned in the section on Bit depth and the number of colors, you can reduce file size dramatically if you use a smaller bit depth. The GIF file format uses this as the primary method of file compression.
While the human eye can see at least 2 Million different colors it is actually rare to find a single image with more than 80,000 unique colors. Furthermore, a full range black and white image only uses 256 variations of gray for the entire image.
The question that arises is "how many colors do you need for a good quality image?" Like most computer and image questions the answer is "it depends".
Due to the large number of images, this topic has been split into multiple Pages.  
1. Niagara Falls Image
      A Slight reduction in color
      24 bit to 8 bit
      BMP and GIF Formats
      Color reduction from 256 to 16 colors
2. Balloon and Tower Images
      Images with No Single Primary Color
      Color Banding
3. Random Examples

Next -----> Niagara Falls Image