Note: web player doesn't currently support 60 FPS rendering, so this is just going to look like a static palette unless you download it.
Hat tip to ilkke for the inspiration.
This is a simple palette vs. palette demo to show off the idea of color interlacing in a very simple way: it uses the new 60 FPS function to render very quickly alternating images of 1. a single large tile version of the pico 8 palette and then 2. a 4*4 matrix of palettes, one lined up perfectly with each of the large color squares.
The result, when viewed, is a flickery implication of 256 separate colors*, one for each combination of two colors from the pico 8 palette. As laid out in this example, that shows up as a series of variously tinted versions of the palette itself.
It'd be interesting to lay out the color combos in a more gradient-centric way, but this was far simpler to throw together as a first experiment.
Here's a rendered approximation of the interlaced effect as a smooth static image, though of course the visual effect in practice has a kind of restless volatility that this doesn't capture:

'But wait!', you shout. 'It's not actually 256 distinct color combos, because you have repeats of each color pair, e.g black-plus-white and white-plus-black! So it's actually more like, uh, uh, 128!' Fine, yes, you're very clever.