Creating the illusion of new colors and shades by varying the pattern of dots. Newspaper photographs, for example, are dithered. If you look closely, you can see that different shades of gray are produced by varying the patterns of black and white dots. There are no gray dots at all. The more dither patterns that a device or programsupports, the more shades of gray it can represent. In printing, dithering is usually called halftoning, and shades of gray are called halftones.
Note that dithering differs from gray scaling. In gray scaling, each individual dot can have a different shade of gray.
Optimizing Web Graphics Webreference.com article on how to minimize file size and dithering for Web graphics. Includes sections on the color palette, color reduction, compression, tools and techniques, and several online references.