Most steganographic software available does not support, nor recommends, using JPG files (an exception is noted later in the paper). The next best alternative to 24-bit images, is to use 256 color (or gray-scale) images. These are the most common images found on the Internet in the form of GIF files. Each pixel is represented as a byte (8-bits). Many authors of the steganography software and articles stress the use of gray-scale images (those with 256 shades of gray or better) [Arachelian, Aura95, Kurak92, Maroney]. The importance is not whether the image is gray-scale or not, the importance is the degree to which the colors change between bit values.
Gray-scale images are very good because the shades gradually change from byte to byte. The following is a palette containing 256 shades of gray.