XaoS can work in either palette or truecolor mode. Both modes have advantages and disadvantages. Palette mode allows effects such as palette rotation, while truecolor mode allows smoother incoloring and outcoloring modes and the truecolor coloring modes. If your display is truecolor, you can enable this filter to get palette emulation (albeit not as cheaply as in a real paletted mode).
More information about filters
Available as: menu item, command line option