1- I open the file(s) i want to in photoshop
2- I change the file(s) to rgb mode
3- I put the colors i want to use on a blank corner
4- I save the pic as a Bitmap (*.bmp)
5- I open the file in MSPaint (I kid you not) and edit it pixel by pixel
6- I reopen the file in photoshop, remove whatever guady background color i had, merge any layers i had (demitri's cape on the chocula) and save as a gif
7- i adjust anything that needs adjusting in MSpaint
I'm sure there's a better method, but that's the method I always use, hope it helps.