@XDelusion
Regarding AB3D 1, as far as I recall, it used a chunky copperscreen display capable of 4096 colours* (hence the blocky 2x2 mode it was stuck with). At least that's a feature it advertises on the blurb on the box on my copy. If true, it wouldn't surprise me if it was able to use sprites with various different palettes, even if not using some sort of RGB-12 format.
*you only have to look at partially flooded areas to see that the water adds a tint to everything immersed in it that would be impractical for a palette based display to cope with.