What does the dithering option do?
Dithering is useful on Pocket PC devices that support only a limited number of colors, such as the iPaq 3600 series, which uses 12-bit color, resulting in only around 4,000 possible colors. This may sound like quite a few, but the human eye can distinguish well over 16 million different colors. Dithering attempts to fool your eye into believing it is seeing more colors than it actually is. This may have the side effect of making the image more “grainy,” but the tradeoff is usually worthwhile. Of course, if you have a Pocket PC device with 16-bit color, it can display over 65,000 colors, and you should not use dithering.