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This is exactly what I don't understand about the existence of this program. I don't know much about compression algorithms, but this is definitely lossy compression. I don't know why somebody would want to use it on their lossless PNGs when JPG already exists.

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PNG8 allows you to use alpha in palettized form. Images you want to use in a "composite" context(icons, buttons, sprites, etc.) really need alpha to look great, but you don't usually need the full color gamut for them either.

You want to use it when you don’t want any ugly JPG compression artifacts to show up. PNG and JPG produce different compression artifacts, depending on what you are compressing either one could look better.

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