7. The Menus / 7.5 The Layer Menu
This function allows to convert one layer kind into another. Following conversions are possible:
The text at the top shows the kind of the active layer (CMYK image, RGB image, gray image, bitmap, vector, group, text). The combo box below that allows to choose the destination kind. Option allows to control the conversion. If - for example - the destination kind is "Monochrome Picture", you can define the kind of dithering.
The switch Document controls, whether only the active layer or the whole document will be converted.
Convert Layer Type can be used to reduce 16-bit-images to 8-bit or the other way round.