"The idea is quite simple, each pixel is split into a red and a green+blue scanline which are interlaced to comprise a 12 bit rgb scanline. Actually, we sacrifice 16*16 of the 4096 possible colors in order to map the red component into colors 0..15 without visual quality loss, however.

As a demonstration I am converting a 320x480 24 bit rgb picture which is quantized to 12 bit rgb and dithered, additionally."

Sorry for bothering again, but I have updated my C2P once more. It now also contains a faster 2x2 version and a little blob demo showing how this can be used in a realtime setting.