This is one of the most changed features in 7 and everyone is a yelling about it too ! lol  Below are some basic explanations in regards to the different areas of the COLOR/STYLE PALETTE and how the new one works. First off we have the swatches like we did in 6 but they have moved to the top.  The biggest dilemma seems to be how to use the colors/textures/patterns and gradients.    

The boxes under the color wheel/picker are the styles and textures.  To choose one you need to click and hold down on that box.  The front being the foreground and the back being the background. (fig1)  My apologies for the image quality, When you do there will be a pop out or flyout what ever you like to call it with three icons on it.

You can choose the paintbrush,which represents solid color. The stripes which represent gradients and the dots that represent pattern fills. To use your own pattern fills simply open the image in PSP and it will appear with the others when the dialog is up.(More details later)The circle with line is NULL, nothing, nada.

Choose the gradient and then click the box again to be presented with the selection of gradients available.  You can also create your own and save them by choosing the edit feature in the dialog box.  You also have the option of using the foreground and background colors that you set in the swatches for solid colors.  Choose the style on the right side, linear, radial etc.  Clear as mud fer ya?  GOOD !  :oP

The textures work the same way as the others.  Click and hold down to have the pop out or flyout presented and then choose the texture as opposed to the null. (fig2) As with the patterns you can create your own textures and use them as well.  

There are a couple different ways to display the color palette through your preferences settings. Choose FILE and then GENERAL PREFERENCES. The preferences all appear. Click the Dialogs and Palettes tab. Here you will see some different options regarding the way the color palette displays. The AVAILABLE COLORS PALETTE displays the same colors no matter how many colors the image contains. The DOCUMENT PALETTE OPTIONS displays only the colors you can use when working with a paletted image.

For instance the image to the left is the document color palette option of a 256 color image. However if you have selected the AVAILABLE COLORS OPTION it will display the image on the right even though you can only use the 256 colors within the palette of the image. The third image shows how the most recent colors dialog box will display when using the latter option. If you need more help in setting your preferences and more detailed information about setting them visit my setting preferences tutorial.

I have a couple simple tuts set up for the following if you are still lost:

• Gradient Filled Text w/Solid Outline
• Simple Pattern Fill w/your image
• Simple Pattern Fill w/existing image