When sticking to multiples of 51, you have only 6 shades to work with including black and white. Victor Engel provides some helpful suggestions for how get some dithered, but acceptable, grays. Color Photos Photos on the Web are simply not going to look very good when viewed on computers limited to 256 colors. Images will either dither a great deal or, if color substitution is at work, will become blocky. Don't be upset to see these effects.
Limited hardware provides mediocre results.
However, this is not to say that 256 colors are not enough to reproduce a photo reasonably well. 256 well chosen colors can do the job. That's where adaptive palettes come in to play.