How do I change the color depth of a monitor in Lion/10.7? I vague remember it being an option in the display prefs or the display menu bar in an older OSX version, but it seems gone in 10.7?
You're right in that Apple removed the option to switch between "Millions" and "Thousands" of colors from the Displays preference pane in OS X after Leopard (10.5).
I've discovered the Quicksilver Displays plugin changes color depth for Lion as well. If you use Quicksilver already (and you should) its very easy - search for the display name, choose the color depth action, and choose the depth you want. It's great for changing display size also.
A little more info is here - http://lifehacker.com/322363/top-10-quicksilver-plug+ins.