The image is an indexed image. You need the corresponding color map in order to do anything with it.
[A map] = imread('lena.bmp'); % read the image and the map
imshow(A,map); % use the map to display or write the image
In this case, the copy of lena.bmp appears to be a color image with a relatively short color table and no dithering. Be aware that there are many versions of this image floating around. Some are I/RGB; some are indexed grayscale or color with varying map lengths and dithering methods. Just because you have a file called 'lena.bmp' doesn't mean it's the same as something you see described in a code example on a forum somewhere.
