Forum Moderators: not2easy
Since PSP stores colours in combinations of red, green, and blue, each with a possible value 0-255, there are normally 255*255*255=~16M available colours. However the colour grey has equal RGB components, so there are only 256 possible shades of grey using the RGB system, hence the reduction in colour depth.
You can re-increase the colour depth on the 'Image' menu (PSP8) or the 'Colour' menu (PSP7).