You can only use 16, but only certain 16, not out of 4096.
If you want to see what they are, open a picture in MS Paint, and save the picture as a 16 color bitmap. The color palette that appears at the bottom of the screen is the 16 that are available for a graphic.
Hope that helps other people too
Mike
P.S. If anyone has different info, and can prove me wrong, I'm all ears!
