Re: Gray Image

The following academic article (PDF form) describes a scheme whereby
3-bit bit depth is just about good enough (visually lossless, or very
close to it at normal viewing distance).

http://web.mit.edu/persci/people/adelson/documents/Li_ACM_24-3.pdf

I don't understand all of it myself (i.e. the math stuff), but I
stumbled across it and figured it would be of interest to you
considering the surprising performance that 3-bits is capable of!

.