Comment by torginus

I think the best way of thinking about dithering, is that it's the 'whitening' of quantization noise. Quantization can be modelled by taking the difference between the originally continuous signal, and the resultant quantized image as "quantization noise". The resultant noise has a spectrum that's pretty 'spiky' due to its non-continuous nature, it has significant energy in its higher-frequency harmonics. By adding some noise before sending it off to be thresholded by the quantizer, the noise's spectrum is made a lot flatter, thus making the quantized image look more like the original image, but with a higher noise floor.