Sprite/Art for My OUYA Game

[Vipershark]

Oh, Ploaj fixed his image. That's more or less the technique you want to go for; dithering looks pretty bad unless it's used in very specific contexts. Instead, you want your pixel clusters to be larger and more, uh... cartoony, I guess?
Ploaj's example is a pretty good way of looking at it, though I'd personally increase the contrast a little more, mostly on the hair.