However, a minor advantage of having a palette is that you can change its colors on the fly, allowing the use of "color-coded monsters" in action games, changing clothes on the hero, but also real-time animated ambient effects on otherwise still images.
A master in the art of palette swapping was Mark J. Ferrari, one of the background artists that worked for LucasArts in the golden age of adventure games. I think it's a good idea to give a tribute to this awesome artist by linking to an article about his amazing techniques, and also to a HTML-5 rendered gallery of his best works. Some of those tricks could be useful again in the new iPod and Phone market.
May this serve of inspiration to all of you. Enjoy!
Canvas Cycle Gallery