Here's something I've put together on this topic (I never knew Chris Covell had written something on it, that's why I did it. Mine may be crappier, but at least it contains some sample C++ code...):

http://www12.brinkster.com/hydesprojects/Color Emphasis.txt

8x16 sprites? Try the "Cart" demo (found on the main page), 1942, and 1943.

hydesprojects.cjb.net