Color Depth

[JirotheHero]

How do I change color depth in photoshop? Soon I'll be making my tech demo to get a feel for the IDE, but I want to make the graphics more of the lines of old Lucas Art games, but I am not sure how to change images into 8bit or 16bit with a limited range of numbers. I tried googling for this stuff, but it wasn't very helpful (or I didnt have a good search string)

[Babar]

Image>Mode>Indexed Colour