Sonic 2 Hacking Guide
Genecyst Savestate - Color Palettes

Editing palettes helps you show off new colorful environments. Palettes are even more flexible in savestates than they are in the binary itself.

011F78 (FB00) - Master palette
011FF8 (FB80) - Fade palette

Palettes use a simple 16-bit format. In the following format explanation, each number represents a nibble (half of a byte), rather than a byte.

#1 #2 #3 #4

1 - ??? (Usually zero)
2 - Blue shade
3 - Green shade
4 - Red shade

Only every 2 values will actually change the color. So, this gives you 8 shades of each color.