On a color monitor, each pixel has three dots arranged in a triad-red, green, and one blue dot. Each dot can deal with a maximum of 8 bits, which makes a total of 24 bits per pixel. With the possibility of combining the 256 levels of color in each of the three color dots, 24-bit color gives you the awesome potential of 16.7 million colors on your screen (256 times 3). Many of these colors differ so slightly that even the most acute observer couldn't tell the difference between them. Simply stated: 16 million colors is more than enough. (How do you get black and white if there are three colored dots? If all dots are on, the pixel is white; if all dots are off, the pixel is black.)
Now, you will often hear of 32-bit color, which there isn't, really. Those other 8 bits don't offer any extra color, but they do offer the capacity for masking and channeling.