Here is what I did. I went to image, mode, indexed, hit OK to flatten layers, the preview on "Windows" was all screwed up. The palette was all scrambled. So I had to go to "Adaptive" palette, and that worked. It is indexed, but I can't find the "index" anywhere!
Then it was simply a matter of select all, copy, open the bitmap file, paste over it, and close/save the bitmap.
[EDIT] P.S. I have Photoshop 5.0