BarnOwl has built-in support for 256-color terminals, assuming your libncursesw (and GNU Screen, if you're using it) support it.

Outside of screen, your `TERM` environment variable must be set to `xterm-256color` instead of `xterm`.  If you're running BarnOwl out of the locker, the `barnowl-256color` wrapper sets this for you.  But to get 256 color support for all programs, put something like this in your `~/.bashrc`:
{{{
case "$TERM" in
    xterm) TERM=xterm-256color;;
esac
}}}

As of Debian Lenny, the stock `screen` is built with 256 color support.  To enable it, first make sure your outer `TERM` is `xterm-256color` as above, and add the following to your `~/.screenrc`:
{{{
# Erase background with current bg color
defbce on
# Advertise 256 color support to inner applications
term screen-256color-bce
}}}

For older platforms, the `barnowl` locker may have a newer `screen` under the name of `screen-256color`; `/mit/barnowl/etc/screenrc` includes the aforementioned additions.

In case you want to use 256-color Emacs inside screen, see [http://debbugs.gnu.org/db/26/2650.html Emacs bug 2650].  (If you use a light-background terminal, you may also want to customize `frame-background-mode` to `light`.)