Yes, each pixel is a 0-255 reference to the color on the palette (0 is transparent). Palette colors are actually 0-63 (since VGA was 6-bit, not 8-bit) RGB values.
For your purposes it's probably easier to just hardcode the tactical palettes (UFO and TFTD) instead of loading and converting the arcane formats since they'll never change. You can probably find copies of them in MapEdit, if not spread around Ufopaedia and such.