Hey, pal, I think you'd be better off taking a look at this. It details a lot of basic concepts in the world of pixel arts.
http://www.vg-resource.com/thread-25474.html
Two problems I see right off the bat are jagged outlines and unusual shading. When creating outlines with pixels, you need to keep in mind that there should be no unnatural breaks in straight lines and the curves need to bend gradually. The red bits you see below are examples of jagged outlines.
As for the shading, I have no idea what you're trying to pull off with it. Are you trying to apply proper shading and maybe place some wrinkles on the body, or is it supposed to be a ghost prune? Either way, I think understanding how a form looks in a 3-D space should help you in this situation. Shyguy would probably tell you more about this, but the thing to remember is that places that receive the most exposure to the light are naturally lighter than everywhere else on the subject.
Also, don't forget to give your shades contrast. Otherwise, they'd blend in with the base color. An effective way to gain good contrast is to employ hue shifting. I won't give you all the details now, but the basic idea is that warmer colors are your highlights, while cooler colors are your shades. Of course, besides altering the luminance and saturation accordingly, the other thing to keep in mind is to use only the colors that border the base color on a color wheel (i.e. orange gets dark red shading and light yellow highlights).