diff --git a/README.md b/README.md
index 06289e7..8a5cdf0 100644
--- a/README.md
+++ b/README.md
@@ -15,10 +15,8 @@ var fs = require('fs'),
     PNG = require('pngjs').PNG;
 
 var png = new PNG({
-        filterType: 4
-    }),
-    src = fs.createReadStream(process.argv[2]),
-    dst = fs.createWriteStream(process.argv[3]);
+    filterType: 4
+});
 
 png.on('parsed', function() {
 
@@ -36,21 +34,27 @@ png.on('parsed', function() {
         }
     }
 
+    png.pipe(fs.createWriteStream('out.png'));
+
     png.pack();
 });
 
-src.pipe(png).pipe(dst);
+fs.createReadStream('in.png').pipe(png);
 ```
 For more examples see `examples` folder.
 
 Documentation
 ================
 
-Currently only true color mode with 8-bit color depth (per color) with alpha
-is supported. PNG cannot parse and create images with palette of colors.
-Interlaced mode is not supported either.
+As input any color type is accepted (grayscale, rgb, palette, grayscale with alpha, rgb with alpha) but 8 bit per sample (channel) is the only supported bit depth. Interlaced mode is not supported.
 
-## PNG
+Supported ancillary chunks
+------------------
+- `gAMA` - gamma,
+- `tRNS` - transparency (but only for paletted image)
+
+
+## Class: PNG
 `PNG` is readable and writeable `Stream`.
 
 ### Options
@@ -80,9 +84,15 @@ two arguments `(err, data)`.
 ### Property: data
 Buffer of image pixel data. Every pixel consists 4 bytes: R, G, B, A (opacity).
 
+### Property: gamma
+
 Changelog
 ============
 
+### 0.2.0-alpha - 21 Aug 2012
+  - Input added palette, grayscale, no alpha support
+  - Better scanline filter selection
+
 ### 0.1.0-alpha - 19 Aug 2012
   - First version
 
diff --git a/examples/test/test.js b/examples/test/test.js
index 5e59d6d..4c58849 100644
--- a/examples/test/test.js
+++ b/examples/test/test.js
@@ -22,8 +22,7 @@ fs.readdir(__dirname + '/img/', function(err, files) {
 
                             for (var i = 0; i < 3; i++) {
                                 var sample = this.data[idx + i] / 255;
-                                sample = Math.pow(sample, 1 / this.gamma);
-                                sample = Math.pow(sample, 1 / 2.2);
+                                sample = Math.pow(sample, 1 / 2.2 / this.gamma);
                                 this.data[idx + i] = Math.round(sample * 255);
                             }
                         }
diff --git a/examples/test2.js b/examples/test2.js
index 466bd1b..bc2a768 100755
--- a/examples/test2.js
+++ b/examples/test2.js
@@ -17,13 +17,10 @@ png.on('parsed', function() {
         for (var x = 0; x < png.width; x++) {
             var idx = (png.width * y + x) << 2;
 
-            // invert color
-            png.data[idx] = 255 - png.data[idx];
-            png.data[idx+1] = 255 - png.data[idx+1];
-            png.data[idx+2] = 255 - png.data[idx+2];
+            if (Math.abs(png.data[idx] - png.data[idx+1]) <= 1
+                    && Math.abs(png.data[idx+1] - png.data[idx+2]) <= 1)
+                png.data[idx] = png.data[idx+1] = png.data[idx+2];
 
-            // and reduce opacity
-            png.data[idx+3] = png.data[idx+3] >> 1;
         }
     }
 
diff --git a/lib/filter.js b/lib/filter.js
index 3b8ec7e..97cbc07 100644
--- a/lib/filter.js
+++ b/lib/filter.js
@@ -200,7 +200,7 @@ Filter.prototype._filterNone = function(pxData, y, width, height, rawData) {
 
     if (!rawData) {
         for (var x = 0; x < pxRowLength; x++)
-            sum += pxData[y * pxRowLength + x];
+            sum += Math.abs(pxData[y * pxRowLength + x]);
 
     } else {
         rawData[y * rawRowLength] = 0;
@@ -224,7 +224,7 @@ Filter.prototype._filterSub = function(pxData, y, width, height, rawData) {
         var left = x >= 4 ? pxData[y * pxRowLength + x - 4] : 0,
             val = pxData[y * pxRowLength + x] - left;
 
-        if (!rawData) sum += val;
+        if (!rawData) sum += Math.abs(val);
         else rawData[y * rawRowLength + 1 + x] = val;
     }
     return sum;
@@ -244,7 +244,7 @@ Filter.prototype._filterUp = function(pxData, y, width, height, rawData) {
         var up = y > 0 ? pxData[(y - 1) * pxRowLength + x] : 0,
             val = pxData[y * pxRowLength + x] - up;
 
-        if (!rawData) sum += val;
+        if (!rawData) sum += Math.abs(val);
         else rawData[y * rawRowLength + 1 + x] = val;
     }
     return sum;
@@ -265,7 +265,7 @@ Filter.prototype._filterAvg = function(pxData, y, width, height, rawData) {
             up = y > 0 ? pxData[(y - 1) * pxRowLength + x] : 0,
             val = pxData[y * pxRowLength + x] - ((left + up) >> 1);
 
-        if (!rawData) sum += val;
+        if (!rawData) sum += Math.abs(val);
         else rawData[y * rawRowLength + 1 + x] = val;
     }
     return sum;
@@ -287,7 +287,7 @@ Filter.prototype._filterPaeth = function(pxData, y, width, height, rawData) {
             upLeft = x >= 4 && y > 0 ? pxData[(y - 1) * pxRowLength + x - 4] : 0,
             val = pxData[y * pxRowLength + x] - PaethPredictor(left, up, upLeft);
 
-        if (!rawData) sum += val;
+        if (!rawData) sum += Math.abs(val);
         else rawData[y * rawRowLength + 1 + x] = val;
     }
     return sum;
diff --git a/package.json b/package.json
index 0e33ee4..1899925 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
     "name": "pngjs",
-    "version": "0.1.0-alpha",
+    "version": "0.2.0-alpha",
     "description": "Simple PNG encoder/decoder",
     "author": "Kuba Niegowski",
     "contributors": [],