Icons and cursors can contain images in different color depths. While all new computers are using direct RGB colors, there were days when the number of colors simultaneously visible on computer display was limited. Since the file formats for icons and cursors were defined in that days, it is possible for them to include images in low color depth using indexes to 1-bit, 4-bits, or 8-bits palettes instead of direct color.
Image using indexed colors cannot contain arbitrary pixels. Instead each pixel must use one of the colors defined in the palette.
In RealWorld tools, the user is purportedly shielded from the palette and the system tries to deliver best results on its own. This is in consistence with one of the value (the KISS principle), upon RW tools are build.
As a result, users do not need to bother themselves with the palette and are free to use any color when drawing. The system automatically generates a good palette and/or dithers the result.
To get the best results, it is recommended to design the icon or image in true-color format and finally copy the truecolor image to the palette-using ones. This ensures that the palette or dithering is performed only once and the image there is no danger of possible cumulative errors.
You can also modify the indexed images directly, but be prepared that the results may look a bit differently than the preview.
For compatibility reasons, 1-bit and 4-bits palettes are hardcoded to the default Windows or Mac OS palettes. 4-bits-per-pixels images are dithered.
8-bits optimized palettes are generated from the actual pixels used in the image.