Yes, you definitely want a palettized output format. But, even so, dithering makes that harder to compress. You're essentially adding noise, which confounds data compression.
Right, it sounds to me that people are confusing Dithering with Compression. Back in the day we used Dithering to represent high-color-depth images in lower-color-depth devices... it sounds similar to compression but it is not.
It's like confounding stenography with cryptography. In a way, both are used to "hide" a message, but they are completely different beasts.
It's like confounding stenography with cryptography. In a way, both are used to "hide" a message, but they are completely different beasts.