It's almost worth starting "The Grayscale Thread" in Peripherals for this discussion!

I've heard it said that the human eye can't distinguish more than 256 shades of gray, but I've often wondered about that. Is it possible to define 512 distinct gradations of gray in a 24bit color graphic? If so, it would be interesting to do that and check it against a matching 256 level grayscale chart in the top half of a comparison file. Looking for a difference in the banding between top and bottom halves of the graphic might prove informative.