The VFD on the empeg is refreshed at a very high rate, I believe as you say currently about 200Hz. However, it has zero phosphor persistence.

The grey scales from the SA1100 LCD port are produced by time-domain multiplexing, which produces 16 possible levels, ranging from a pixel being on for no time (black), to being on 100% of the time (white). Mid-level grey is produced by turning the pixel on for 8/16ths of the time, and off for the rest,
a much dimmer grey is on for 1/16th, off for 15/16ths, and so on. This is all done in hardware.

The effective result is that shades other than black or white are done by turning a pixel on for n out of 16 frames, and off for m out of 16 frames, where n + m = 16. This means that you wouldn't get very pleasing (or effective) results if you also frame-multiplexed different grey-scales.

The real problem is as I mentioned earlier, the VFD's lack of any real persistence. A CRT, and most mono (usually passive-matrix) LCDs, have a relatively long persistence, which allows a TDM scheme like this to produce convincing grey scales. Unfortunately, no persistence equals horrible flicker for most of the potentially available grey levels. Only black, white, and two intermediate shades were deemed suitable for public viewing, and that only due to the very high refresh rate. Most of the rest are good epilepsy-inducers, but not very viewable. Moving graphics look even worse!

This sort of problem is not limited to VFD technology. Plasma panels, particularly the older ones used for things like the old Compaq and Toshiba luggables, were awful for it. I've run some old EGA grey-scale programs on an old Compaq I have, and anything other than black or white gives you a headache almost instantly.

Incidentally, I devised a circuit for driving those old plasma panels from a normal VGA card, and in theory it would be possible to run one from an empeg, giving a 640x400 bright orange screen! It would need a lot of work rewriting the display drivers, at the very least, but perhaps a future project?

(I managed to get X driving one of the things, and since each is only one bit, 8 in parallel can be driven from one VGA card. I and a friend are planning on constructing a completely digital dashboard for our incredibly ugly kit car using 4 displays for the instruments, one larger one with a touch screen for the controls, and a final one for a HUD.)

Opinions expressed in this email may contain up to 42% water by weight, and are mine. All mine.
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Experience is what you get just after it would have helped...