A Fire Effect Text Problem ¬_¬

Heeeey, first time poster, long time forum browser ^_^

i've got a problem, at the moment i've been using this little tutorial to try and design a logo for some friends, but i've got to the stage 6 as it is listed on there, and my hidden layer gets discarded when i try and convert from grayscale- to indexed colour, i get the message "flatten visible layers and discard hidden layers",
I can either click okidily dokidily or no, and the latter it just brings me back to where i was a few seconds ago.

Any help GREATLY appreaciated,
Thanks
Nathan< (^_^)<

When asked the question, tell it no.

While it may look like you are where you were, you actually are not. You will not visibly see what changes were made because it is just changing the color mode.

In the titlebar of the image it will say index instead of gray. thats the olny change you are making.