I think it is deliberately not possible to move to 8-bit as a desktop option. XP only allows older apps to force the issue because otherwise their palette switching tricks simply wouldn't work (without some sort of palette switching emulation that would seriously impinge performance).
Performance-wise 8-bit addressing will be far slower on modern architectures, not faster. While you would in theory be pushing less data around the graphics chipsets are designed to operate in 32-bit blocks to addressing smaller values actually takes more effort. Also most application objects will still be processed as a true-colour image only being translated down as needed before being pushed to the screen's frame-buffer for each update.
Another common reason for dropping colour depth used to be limited graphics RAM. As a 1920*1200@32bit image is less than 9Mbytes no modern graphics card in a desktop machine is going to struggle to hold that even accounting for fancy effects and memory consuming techniques like triple buffering and some window having its own large surface processed separately as a frame-buffer by the GPU.
If I may ask, why do you wan't to lower it down to 8-bit? – Specur – 2010-11-16T18:16:24.953
1i want to run a lot of VMs whose displays i need to see, but don't care how it looks. im thinking this will run faster as it'll need less video processing power? – Claudiu – 2010-11-16T19:45:13.577
That's not true, it doesn't require more video processing power. Since it's just desktop 2D graphics. Stick with the 32-bit. – Specur – 2010-11-16T21:00:26.307
3wouldnt it need more VRAM at least? 2.5 megs instead of 5 megs for 1280x1024 – Claudiu – 2010-11-16T21:35:16.233
Another good reason is for testing purposes. I'm writing software that needs to run all the way down to 8-bit color, but when I spun up an XP VM to test this, I find it not an option. Luckily, you'd already asked! +1 – Cody Gray – 2013-12-30T12:03:39.110