I'm not sure what do you mean by "only playing back at 256 color"... Do you mean that you must set your Windows desktop into 256 color mode to play a movie? Or that the movie is recorded in 256 colors, but plays in any color mode? Please describe the problem in a lot of detail. If you want, you may also email me a short AVI movie that you can not play back in more than 256 colors for inspection. You may email it to support@hyperionics.com
It doesn't have to do with Hypercam. The bad look comes from my video cutting software ;-). Played with Media-Player (or after adjusting settings in the cutting software) everything's fine.