This issue has been reported on Power Macintosh computers running either System Software 7.1.2, or System 7.5. We have also had reports on Quadra AV computers. This issue has been fixed with the release of System Update 7.5 version 1.0, and you should install it.
If you do not have access to System Update 7.5 version 1.0 use the workaround shown below:
1. Open the Monitors control panel.
2. Choose 256 colors or Black & White.
3. Close the Monitors control panel.
4. Re-open the Monitors control panel and reselect the desired color depth.
We have found this problem will reset PRAM after a system crash when the colors are set to millions, and occasionally when switching to NTSC/PAL output on a Power Macintosh AV.
The key to resolving the issue is to have the Monitors control panel update PRAM and the System File.