Just throwing my version in there. The Chaotix suffer the most because of their high-color origin, but they don't look terrible.
The point with Espio is that he has a completly different shading style. I think that the most correct thing to do would be reshading him. It would be a really hard work, but otherwise he may end looking bad, or even like crap sometimes.
The only decent S3 styled Espio sprite I've ever seen was this old relic: And even then, I have no idea who made it. Possibly some guy named Shiver, since I think he was the one who originally uploaded this mock up.
If you take the view that Mighty and Espio match, then the character is already drawn in a "classic style" - just something more akin to Sonic 1/2 than Sonic 3. Either way I don't think he sticks out as much as that Rouge sprite, for example. And then there's Tails who is virtually unchanged since Sonic 2, so unless you're willing to redraw everything, it'll never be perfect.
I had tried a palette with one less gray too; and discarded it because, as you can see, it does not look all that great. There is also an inconsistency in your shading of Shadow: his darkest gray was mapped to gray instead of black, like what you did for everyone else.
Palette management sounded like fun so I gave it a shot, though I accidentally made it look like everyone's underwater. Aimed for detail and range of colors rather than accuracy At one point I tried having one shade of blue as opposed to two, but it made sonic look too mechanical and sonic 1-ish
I actually really like this palette over all of the other attempts I have seen so far. The underwater look that you describe is, I think, down to the use of a dark grey instead of a black, and warmer orange/yellow use for muzzles and the like. The only thing I would change would be the blue highlights on Shadow for the second darkest grey. Apart from that, they all look pretty good like that, in my opinion. EDIT: Quoted due to new page.
I've not particularly liked any of the 1-line palettes up until now. Black Squirrels edit of VAdaPEGA's one wins out easily.
Agreed. Big, Tikal and Cream/Cheese should be able to fit in no problem now as well. ...still prefer preset teams, but if it doesn't happen then oh well.
Well, the trouble now is the S2 special stage sprites I am thinking: preset teams for ease (select a team and play), with a custom team option allowing you to select team members. Preset teams can have all 3 players in S2 special stages, custom teams have only the leader. Yes, I am assuming S2 SS sprites can't be compressed into the 2 palette lines available for them.
Hmm... guys? What about colours that VDP can actually show? According to the table that nikenko showed me, this is how they could look: It's amazing how Espio still gets away with 4 shades. I envy him.
Perhaps you can post the S2 SS sprites and palettes? People here seem to be interested enough to get freeform teams working this much, they'll find a way to get that working too.
That will have to wait until tomorrow night at the very least; I am actually traveling, and I have only my tablet and phone with me. The images I posted were a bit old, and already in imgur.