You have to convert the palette file to an .act file using a utility like MDMRE's MTM Palette Master available here:
MTMG/Utilities/MDMRE Or if you are using Traxx you can simply copy your texture to the Clipboard (after reducing the colors to 8-bit paletted) and paste into Traxx (into the Textures box). You will then be prompted to give your texture a unique 8-letter name and Traxx will create the .raw and .act files for you.
Hope this is some help.
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Keep on Monster Truckin'
EmceeMart