JeremyAnsel.ColorQuant is a .Net color quantizer based on Xiaolin Wu's Color Quantizer. For a given 32-bit RGB or ARGB image, it will produce a 8-bit palletized image.
C Implementation of Xiaolin Wu's Color Quantizer (v. 2) (see Graphics Gems volume II, pages 126-133) : http://www.ece.mcmaster.ca/~xwu/cq.c.
Algorithm: Greedy orthogonal bipartition of RGB space for variance minimization aided by inclusion-exclusion tricks. For speed no nearest neighbor search is done. Slightly better performance can be expected by more sophisticated but more expensive versions.