The Palette API was added in LabVIEW 8.6 to give us an easy way to read and write information in palette (.mnu) files. The contents of the .mnu files in the [LabVIEW]\menus folder (along with .mnu files in other locations like user.lib) define all the objects that appear in the LabVIEW palettes (and by extension, all the objects you can drop with Quick Drop). If you are writing a G-based utility that allows for the customization of palette contents, then you'll probably have a much easier time using Read Palette.vi and Write Palette.vi than any other method.
In addition to these two VIs, there is also an Application method called Refresh Palettes that will update the contents of the LabVIEW palettes after you have manipulated them with the Write Palette.vi. I know some utilities (like the VI Package Manager) use the Refresh Palettes method after adding/removing/modifying palette content to avoid a LabVIEW restart.
Check out the Palette API examples in [LabVIEW]\examples\Palette API for more details.
