Right now I'm working on my first operating system with help from some people I know. When I first told them I was using a sixteen colour palette (more specifically the CGA palette: Wikipedia) they said something along these lines:
"We have way more colours and processing power now, so why use sixteen colours?"
The answer; simplicity and beauty.
I don't know if I'm the only one that thinks this, but I find that limitations breed creativity and force you to focus on conveying information you need rather than the details that you don't need. It's also easier to do for a new operating system project, instead of getting dragged down by how the interface looks you can spend more time polishing the insides and adding more functionality. We all wish to have the prettiest operating system that everyone loves, but you need something that works first before considering which font to use for your interface, what colour is the background etc.
In short, you don't need sixteen million seven hundred and seventy seven thousand two hundred and sixteen colours to create a good-looking operating system. I made this fairly quickly in paint.net (fonts, icons and all) and it doesn't look half as bad as you may imagine:

Though sixteen million colours are great (nice blur effects, gradients etc) that many colours is not required.
Just thought I'd share this and get a second opinion on it. Anyone agree/disagree?