When you decrease the color depth of an image, you must select a palette option. Depending on the color depth you select, two or three of these methods are available:

Optimized Median Cut — measures and ranks each color by how frequently it occurs in the image, then uses the most frequently occurring colors to determine the new palette. Even if your image contains fewer colors than the palette that is generated, this method may not represent each color exactly. The method, therefore, is not as accurate as the Optimized Octree method, but it is better at weighting color importance.

Optimized Octree — creates an eight-level “tree” with eight branching nodes totaling 256 individual “leaves” or colors to determine the new palette. This method attempts to reproduce each color in the original image, so if your image contains fewer colors than the palette that is generated, every color in the image is represented. This method is faster and more accurate than Optimized Median Cut, but is not as good at weighting color importance.

Windows — changes each pixel’s color to the nearest color in the Windows palette

Standard/Web-Safe Palette — changes each pixel’s color to the nearest color in the standard Web-safe palette. You can use this method to create images for the Web that can be viewed without color distortion on most monitors.