@mathil: Ah, right, my Kindle habits mean that I basically forgot about the extra features I'm not used to having in the Devices tab, so I never actually end up using it much

.
I can't really say how that actually ends up behaving as far as this is concerned, since my whole library is grayscale & dithered

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But, as another data point, I just checked the on-device store (I'm on FW 4.9), and it does things right: stuff is either grayscale, or in the "right" pixel format (for the device

).
It's kind of hard to catch in action, since I'm using fbgrab to take screenshots, and it also does things right by putting things back in the right pixel format, so I'm actually getting a coherent RGB png that looks fine on an LCD screen

.
I can't vouch for Nickel's own screenshot capture, since I've never used it

.