DirectDraw supports 1-bit (2 entry), 2-bit (4 entry), 4-bit (16 entry), and 8-bit (256 entry) palettes. A palette can only be attached to a surface that has a matching pixel format. For example, a 2-entry palette created with the DDPCAPS_1BIT flag can be attached only to a 1-bit surface created with the DDPF_PALETTEINDEXED1 flag.
Additionally, you can create palettes that don't contain a color table at all, known as index palettes. Instead of a color table, an index palette contains index values that represent locations another palette's color table.
To create an indexed palette, specify the DDPCAPS_8BITENTRIES flag when calling the IDirectDraw2::CreatePalette method. For example, to create a 4-bit indexed palette, specify both the DDPCAPS_4BIT and DDPCAPS_8BITENTRIES flags. When you create an indexed palette, you pass a pointer to an array of bytes rather than a pointer to an array of PALETTEENTRY structures. You must cast the pointer to the array of bytes to an LPPALETTEENTRY type when you use the IDirectDraw2::CreatePalette method.
Note that DirectDraw does not dereference index palette entries during blit operations.