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Axnjaxn was probably talking about the crappily drawn and recolored monsters I slapped on one of the wisdom extra graphics sheets -- they were literally one sprite that would animate by flipping, and were four recolored versions of the same sprite. Womp womp. (Also I might've included a font twice? Have to check.

But yeah, since other colors don't have ranges like the grays do, I tend to just do either two color (main color, shadow edge) or three color ones -- main color, highlight, shadow. 

(Then, in case folks didn't dive into the demo cart, other "palette animation" sprites are painfully made so you can animate them by changing what palette colors are and which are transparent, like the Ninjoe whip and particle sprites we did.)