Lately I have frequently been asked what programs I use for pixeling and/or animating and also in general how I go about it. Now I currently don't have the time to create a tutorial of my own but I figured until I will be able to do so I could at least give you some helpful tips and link you to some tutorials made by others.
About the programs I use
I do pretty much all the pixeling itself in Photoshop Elements 8.0 which sadly enough isn't free. But don't worry, in general photshop is even a little overpowered for pixel art, I simply use it because I am most used to it.
Technically you can even use Microsoft Paint for pixeling, after all the only two things you really need to be able to create pixel art is a pen tool and the ability to zoom in far enough. The only real disadvantage about Paint is the lack of transparency support so you can only create pixels with an opaque background.
However I can offer you a really great third optio