Your idea of using the color-levels from your LogoEditor is nice, but my software doesn't care. It just tries to evaluate the available color levels in the bitmap.

Right. I knew that.

I prefer, though, to preview my work on the PC screen, and perform adjustments to it, so that I know how it's going to look on the player before I send it. If I send it a pure grayscale image, I have no control over the cutoff points. If I do the color reduction in PSP first, I can see how it will look and then I can change things to make it look better.