I think some of the newer cards do not even let you chose 256 anymore. You have to go to Settings/Advanced/Adapter, and pick one of the "List Modes" settings that shows 256 color. Looks terrible too. Glad I only did this for a few mins.
Now my question is, wtf is this oldeq? Are you saying this is what EQ started like day 1? I was not around for that - thank god. This looks almost as bad as Ultima Underworld 1 - circa 1992.