I understand that two colors have to be used for the ENTIRE game, but what if I wanted to create the illusion of depth at least with dithering?  This involves using two colors to give the illusion of additional colors.  Is this allowed?

I don't really know. But if you see more than 2 colors on screen (like if you use some transparant sprite) it's not allowed. If we use a peek colors tool to get the hexa code, we need to have only 2 differents code.

Oh sorry I've miss understand what is dithering. You can use it if when you use a color picker, you can only pick the 2 basics colors. And you can use it but without to small pixel.