Hey Mographics!
What dither pattern/shape are you using when animating the "Offset Y"? Depending on the shape it may not have any effect such as if it's using a vertical line shape anyways such as with "Vertical 1x8" or "Vertical 2x2".
Do you have an image of what it does when applied to your fireball video? It should still show even if there is a lot of transparency as the plugin will only operate on the colors and not the alpha. What are your dither settings for it? Does it show in the viewport but not when rendered out?
Also you must click "Load Palette" on the top of the effect to load in a custom palette file.
The button under "Custom Palette" is for resetting the one you already have loaded in and the label on the left of it shows how many colors have been loaded in.
To enable the "Reset palette" button you must set the current color swatch setting to "Custom" so that it will use your custom colors rather than the preset ones and enable the additional options.
I currently don't have a video tutorial on the custom palettes but to create a swatch you can use something like photoshop and illustrators swatch window and saving the swatch for exchange so that you can get a .ase file to import. Another option is the online tool "Adobe Color CC"(used to be known as "Kulor") which allows you to create and save swatch files online.