Ok, i'm here, time to help again
Toxic Bunny pretty much explained why your palette didn't work, so i'll answer the other questions

And you were right about it not being 256, it is actually 160 WITHOUT the Jazz 2 colours, and if you're gonna make a textured background with your tileset (which will take up an extra 32 colours) the amount of colours is reduced to 128! That's half the amount of colours you started with. But okay, enough of that, time to give you guys some toys and info to play with.

First of all, whenever you make a palette for JJ2 it _MUST_ include the default jazz2 palette inside it. You're welcome to edit these colours a bit, but if their entries are wrong you'll end up having some serious problems. You can find the palette here:
http://users.surfanytime.co.uk/disguise/jazz2.pal
This is your basic palette. Whenever you want to add colours, add them in palette entries 96-255 (this will total 160 colours).

If you're including a textured background, add those 32 colours in palette entries 176-207. I also made a nifty lil image that'll explain a bit about making textured abckgrounds and all the precautions you gotta take:
http://users.surfanytime.co.uk/disguise/texturehelp.gif

ENJOY!!!
*dissapears into nothingness*