[ProDigit]

If 8 bits per pixel results in 256 grey tints.

Then in color there are 4 pixels per cluster (white/black, white/red, white/green and white/blue; or whatever magenta color it will be).
so if every pixel had 2 modes, 'on' or 'off' (off being white, on being color), you'd have 16 colors.

If every pixel had 4 positions (Off(white), light, dark, on(color)) you'd end up having 256 colors. Depending on if it's possible for each pixel to have sub colors or not.
If it's not possible, you'd have to 'borrow' other pixels to form a cluster of pixels.
This way one could like on a TV eg: have 4 pixel rows merging as one major pixel. That's (probably) called rendering.
If colors are displayed red green blue white in this order on the screen:
RGBWRGBWRGBW
RGBWRGBWRGBW
RGBWRGBWRGBW
RGBWRGBWRGBW
They probably will create major pixels like this:
=====
|RGBW| \
|RGBW| .| FIRST LINE, FIRST PIXEL GROUP
|RGBW| '|
|RGBW| /
=====
|RGBW| \
|RGBW| .| NEXT LINE, FIRST PIXEL GROUP
|RGBW| '|
|RGBW| /
=====
..... } .....etc.....



===== ==== =====
|RGBW|RGBW|RGBW| \
|RGBW|RGBW|RGBW| .| On screen Pixels are
|RGBW|RGBW|RGBW| '| grouped like this
|RGBW|RGBW|RGBW| .|
===== ==== =====
|RGBW|RGBW|RGBW| '|
|RGBW|RGBW|RGBW| .|
|RGBW|RGBW|RGBW| '|
|RGBW|RGBW|RGBW| .|
===== ==== =====
|RGBW|RGBW|RGBW| '|
|RGBW|RGBW|RGBW| /
...........

Each pixelgroup having 4 lines of 4 colors assigned to them; that's 16 effective pixels that get lost in what supposed to be one pixel.

In other words with current 800x600 e-ink screens, we might end up with a device which has a meager 200x150 pixels to get the full 256 colors. 200x150 pix is good enough for thumbnail pictures or avatars on a forum.

To get more detail they need to use some sort of rasterization, or whatever the name is (like the old bootscreen of Windows98 and NT which has only 256 colors, but due to the ... effect used ... (the name of which I forgot) it looks like it actually has more than just 256 colors).
Large surfaces of plain colors are drawn as close to the original color by borrowing other pixels to complete the color, while fine details will lose some colors over displaying details (pixels are released of a group to get a sharper detail)...A nice compromise between the resolution and colors.

I only wished I remembered the name of that style of rendering.