Looks like a hard limit: http://searchwinit.techtarget.com/tip/0,289483,sid1_gci1179793,00.html

"Unfortunately this is not possible with Windows 2000. 256 Colors is the maximum resolution for terminal services sessions for this OS. This isn't a limitation of the server OS, but of the protocol. Unfortunately, you can't upgrade the protocol on the server side, so to get greater color depth you'll need to either upgrade to Windows Server 2003, which does have a version of the RDP server component that supports full color, or install MetaFrame on the Win2K terminal server and get greater color depth using the ICA protocol."

If you need multiple remote sessions you'd need to do one of the above. If you only need one, you could try something like LogMeIn or GoToMyPC (the former has a free version that doesn't support file transfer or remote printing but is otherwise functional). I don't know of any of these 3rd-party mediated services that support multiple simultaneous sessions on a single computer.

>My client says: "As I thought, Windows 2000 Terminal Services is limited to 256 colors."
>
>Is this correct? What can be done about this?
>
>>The images on the remote machine (running Terminal Server) look lousy, especially photographs. I suspect Windows Terminal Server, and I suspect the color depth is automatically downsized to save bandwidth. When connecting, I set an option to use 24-bit color - just temporarily, since I don't have a good bandwidth - to no avail. Is there some other relevant option? Or should the greater color depth be enabled on the server side, on Windows Terminal Server?
>>
>>TIA,
>>
>>Hilmar.
>>
>>------
>>
>>Update: I see the remote machine has only 256 colors enabled. Perhaps the video driver is not installed correctly. I'll consult with my client.