Our vision is analogue and not digital. We have 3 types of cones in our retina containing slightly different pigment that absorb in the blue, green, and red. However, when you look at the absorption curves there is considerable overlap. I have never read anywhere saying exactly how many colors we can see and I am not sure that really has any meaning in the way our eyes work. The way our brain is wired for vision gives us a remarkable ability to discriminate subtle differences.
Vernier acuity is our eyes ability to see a break in a line. We can see a break that is as small as 3 seconds of arc which is less that the separation of the photoreceptors in our eye. Color works similarly. Green is green until you take two greens and put them next to each other. Then you can pick up very subtle differences between them.
What this means is that if you are just looking at a 16bit image, it will look fine until you compare it to, say, a 32bit image. Then you will be able to detect subtle differences.
For me, when the action is hot and I have enemies to FRAG, I care about smooth gameplay, not subtle improvements in the scenery.
<i>Speed doesn't kill,</i> <b>lag does.</b> 😎 James