Arbitrary-palette positional dithering algorithm

This paper introduces a patent-free¹ positional (ordered) dithering algorithm that is applicable for arbitrary palettes. Such dithering algorithm can be used to change truecolor animations into paletted ones, while maximally avoiding unintended jitter arising from dithering. For most of the article, we will use this example truecolor picture and palette. The scene is from a PSX game called Chrono Cross, and the palette has been manually selected for this particular task. You may immediately notice that the palette is not regular; although there are clearly some gradients, the gradients are not regularly spaced.