Don’t you just hate it when you try to do something in PSP and it says, ‘This tool can only be used on 24 bit color or greyscale images’? This tutorial shows you how to fix it.
Go to ‘Colors’ > ‘Increase Color Depth’ > ’16 Million Colors (24 Bit)’ and you will be able to do any effect you like on the image.
Alternatively, just copy the image, paste into another graphics program e.g. Paint, then right click and copy it again, and paste it back into PSP for the same result.