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I connect to a remote computer using mstsc on a slow connection. Now I have set the settings in the experience tab to the lowest. I was wondering if reducing the color depth will improve my experience any further

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Yes it will. If you go from 16 bit (65535 or thousands) color to 8 bit (256 or hundreds) color, that halves the amount of data that terminal services needs to transmit in the image. Eight bit color does look pretty bad.

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... In addition, should be made clear - talking about the option inside mstsc / remote desktop connection and not manually changing the option when connected. –  William Hilsum Apr 3 '10 at 0:50
Yes I am talking about setting the option from my mstsc client and not on the remote computer –  Midhat Apr 3 '10 at 15:11

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