The color reduction is performed using a nearest color algorithm, so the original image can have as many colors as you want (although you will get better results if the original image has the same palette you specify in the config file). The "g" switch can be useful to check the color reduction results without having to use a CPC emulator.
Latest versions of Img2CPC are included in the [[CPCtelera|CPCtelera game engine]].
[http://www.amstrad.es/forum/download/file.php?id=840 '''Download Img2CPC''']