2D Animation Design, The good vs the bad?

I’m not very knowledgeable when it comes to the actual creation of games, I understand networking and game-logic, but when it comes down to the visual optimization of a game you can count me out. I’ve been writing down blueprints for a game that I can’t decide on rather or not I’m going to use a 2D view or a top-down 3D view. The things that are bumming me out about the 2D design is shadows and lighting, it seems really hard to do.

However, I’ve been doing some reading about 2D design and everyone is stating that animations in 2D are horrible, and large 2D games are always memory hogs, because of the massive amounts of images you have to store in memory for the animations. The more I think back, the more this seems to be true.

What’s the best way to optimize 2D graphics?

Let’s say you’re going to have 500-1,000 animated entities on the screen at once? ( For instance, Rollercoaster tycoon type stuff)

Try to use sprite sheets to reduce draw calls. If memory’s a big issue, maybe use 256-color sprites with 1-byte per pixel and use a palette shader.