Koh's New Sprite Joint

[Koh]

you're cramming too many colors in such a small sprites. remove some shades in order for the sprite to be more readable.

If you mean the whole palette up there, only about half of them are actually in place on the sprite.  The rest are defined for when I need them later for other things, like mugshots and such.  The main sprites only ever use the flat color and the first-level shade for shading, which is why they look relatively flat.  If I remove that single shade use, he'll look even flatter. The hair uses a highlight, but only a couple of pixels within the mass.

I'd have to say that the AA on these is super aggressive; it makes the outline stand out like a lot, and kind of makes them look blocky

Maybe reduce that a little, or maybe if you are using alpha transparency for the AA, increase the transparency a bit to make those outlines fade a bit

I am indeed using alpha transparency.  I could experiment with 50%; the sheet here used 75%.  The GIF format doesn't support translucent pixels, however, so they're opaque on the spinning GIFs.