This seems like straining the definition of "compression". We have a delta-coding filter and then palettization? That's it?

Edit: I should say, I find it surprising (but cool) that it apparently works so well. I would have expected errors to accumulate since the decoder has to un-delta-code. I saw mention of Floyd-Steinberg dithering and presumably that's what it's for; seems hard to get it working across multiple colour axes simultaneously, but the complexity is all in the encoder, so.