Gif image quality

I am just curious as to how to get the best quality out of a gif file. I would like it to have a clear background so it is either a gif or png. The png appears to be better quality but the file size is a lot bigger than the gif. I am using Adobe Photoshop CS 8.0 and have attached a screenie of my choices when I save as a gif. Thanks for any help
AttachmentSize
Image icon pschoice.jpg50.2 KB

Use as few colors as possible
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In the design you mean or in where it has the 256. The setting I have there now is so far what seems to give me the least amount of pixilation fuzziness