The median cut quantization with a few tweaks (using the the variance typically - see the post for more) actually gives very good results. According to your pos

The median cut quantization with a few tweaks (using the the variance typically - see the post for more) actually gives very good results. According to your post, it seems it will not provide much better results with Octree, if any. That calls for testing though (I won't but feel free to, the infrastructure is ready for you to hack in), as improvements are very welcome. Concerning the dithering, you can disable it (dither=none). And indeed, it kills the compression, mainly when using animation, that's why I added the diff_mode option typically (see at the end of the post).