The SGB/SNES provides 8 palettes of 16 colors each, each color may be defined out of a selection of 32768 colors (15 bit). Palettes 0-3 are used to colorize the gamescreen, only the first four colors of each of these palettes are used. Palettes 4-7 are used for the SGB Border, all 16 colors of each of these palettes may be used.
Colors are encoded as 16-bit RGB numbers, in the following way:
FEDC BA98 7654 3210 0BBB BBGG GGGR RRRR
Here’s a formula to convert 24-bit RGB into SNES format:
(color & 0xF8) << 7 | (color & 0xF800) >> 6 | (color & 0xF80000) >> 19
The palettes are encoded little-endian, thus, the R/G byte comes first in memory.
Color 0 of each of the eight palettes is transparent, causing the backdrop color to be displayed instead. The backdrop color is typically defined by the most recently color being assigned to Color 0 (regardless of the palette number being used for that operation). Effectively, gamescreen palettes can have only three custom colors each, and SGB border palettes only 15 colors each, additionally, color 0 can be used for for all palettes, which will then all share the same color though.
Because the SGB/SNES reads out the Game Boy video controllers display signal, it translates the different grayshades from the signal into SNES colors as such:
White --> Color #0 Light Gray --> Color #1 Dark Gray --> Color #2 Black --> Color #3
Note that Game Boy colors 0-3 are assigned to user-selectable grayshades by the Game Boy’s BGP, OBP0, and OBP1 registers. There is thus no fixed relationship between Game Boy colors 0-3 and SNES colors 0-3.
A direct translation of GB color 0-3 into SNES color 0-3 may be produced by setting BGP/OBPx registers to a value of 0E4h each. However, in case that your program uses black background for example, then you may internally assign background as “White” at the Game Boy side by BGP/OBP registers (which is then interpreted as SNES color 0, which is shared for all SNES palettes). The advantage is that you may define Color 0 as Black at the SNES side, and may assign custom colors for Colors 1-3 of each SNES palette.
Beside for the actually visible palettes, up to 512 palettes of 4 colors each may be defined in SNES RAM. The palettes are just stored in RAM without any relationship to the displayed picture; however, these pre-defined colors may be transferred to actually visible palettes slightly faster than when transferring palette data by separate command packets.