Hi,
I've just been using the "Selective Palette" and it works quite good, but one thing that would make a really big improvement in the output image is if you could add a dither mode. The below screen shot is from photoshop, I've found that setting it to Diffusion 75% does a nicer job of conversion than with dithering set to none.
Here's an example of an image with a selective palette converted with and without dithering