>The question is, can it be used on the IIIx/V/Vx/VII/IIIe for 16 level
>gray support?
On a version of Palm OS software earlier than 3.5, no. The blitter only
understands 1 and 2 bit deep screens. You can hack it, but don't expect
forward compatibility.
3.5 has real support for 1, 2, 4, and 8 bit color/grayscale. Of course the
hardware also has to support it, so for example the current Palm VII
devices don't support 16 shades of gray since they're not using an EZ
processor. But 3.5 running on the other ones you listed will work fine in
4 bit gray.
-David Fedor
Palm Developer Support