Game Engines and palette effects

[Maxim]

Well he means, in Mega Man, when you switch between weapons, Mega Man's color changes for each weapon. So, having the character swap palettes instantaneously for different conditions, I suppose.

Exactly. Also, here's an example for color cycling:
http://en.wikipedia.org/wiki/Color_cycling

Having control over the palette allows you to work more efficiently. Otherwise, you may have to insert whole sprites/tiles over and over again, even though they are only different colored. Of course, people may say "that's a thing of the past, because nowadays there is plenty of disk space" but it's just a waste and avoidable. Unfortunately, i am not good enough at programming to build an engine from scratch, so as a beginner at game development, i am stuck with the 'general purpose' engines.