> But the sprites both seem to use the first palette. How do you
assign
> palette 1 to a sprite? Thanks in advance.

From the cowbite spec
(http://www.gbadev.org/files/CowBiteSpec_dec29.zip)
You set the palette number by setting the top 4 bits of attribute 2.
Eg
*attribute2=(palletenum<<12)+(priority<<10)+sprite


Bytes 5 and 6 (Attribute 2)

F E D C B A 9 8 7 6 5 4 3 2 1 0
L L L L P P T T T T T T T T T T

L = Palette number. If you use 16 color palettes, this tells you
which pallette number to use.
P = Priority. This controls the priority of the sprite. Note thate
sprites take precedence over backgrounds of the same priority.
T = Tile number. This value indexes selects the bitmap of the tile to
be displayed by indexing into the tile data area.