Normally a 16-bit pixel is 5 bits of red, 6 bits of green, and 5 bits of blue data. The minimum-error solution (that is, for which the output color is guaranteed to be as close a match to the input colour) is:
red8bit = (red5bit << 3) | (red5bit >> 2);
green8bit = (green6bit << 2) | (green6bit >> 4);
blue8bit = (blue5bit << 3) | (blue5bit >> 2);
To see why this solution works, let's look at at a red pixel. Our 5-bit red is some fraction fivebit/31. We want to translate that into a new fraction eightbit/255. Some simple arithmetic:
fivebit eightbit
------- = --------
31 255
Yields:
eightbit = fivebit * 8.226
Or closely (note the squiggly ≈):
eightbit ≈ (fivebit * 8) + (fivebit * 0.25)
That operation is a multiply by 8 and a divide by 4. Owch - both operations that might take forever on your hardware. Lucky thing they're both powers of two and can be converted to shift operations:
eightbit = (fivebit << 3) | (fivebit >> 2);
The same steps work for green, which has six bits per pixel, but you get an accordingly different answer, of course! The quick way to remember the solution is that you're taking the top bits off of the "short" pixel and adding them on at the bottom to make the "long" pixel. This method works equally well for any data set you need to map up into a higher resolution space. A couple of quick examples:
five bit space eight bit space error
00000 00000000 0%
11111 11111111 0%
10101 10101010 0.02%
00111 00111001 -1.01%