Mega Man Sprites....Oil Man!!

[Gors]

Also I might add that character sprites got 4 colors, one of them must be the alpha channel (transparency).

While I'm agreeing with almost all what you've said, some Megaman sprites have more than 3 colors. Megaman himself has 5 colors (black, peach, white, blue, dark blue), so I don't see anything wrong with the sprite, palette-wise.