To use an often misused statement, I will be brief. There isn't enough spriters round here. Recently, I became a competent spriter, so I figure that I should share the basis.
Step 1: The battler
Ok, outline it in black. Get a shape, you know?
Then fill it in. Start off by taking a very dark shade of the colour you're using and replacing all the black in the area with it.
Then get a colour a little bit further up the scale and bucket fill the area. This will be your main shade.
Now, outline an area, covering most of the area you're concentrating on. The main shade should only be visible at the edges (in most cases. But you'll have to work it out for yourself, since this is too general a subject for me to talk about shadows in detail (Actually, it's just another reason for you to practice. But don't tell anyone, ok?)).
Get a colour slightly further up the slider and use it to highlight the place. You'll have to decide for yourself where the highlights should be, cos I don't know where your light source is.
Finally, get the extreme of your colour, at the very top of the slider and use it to highlight your highlights. Then, fill in the rest of the battler using the same technique (different colours, obviously.)
Save it as your battler and move on to step 2.
Step 2: Resizing
Should be obvious. Select all of your image and resize it down to the size of your sprite. Then, touch up your sprite, making sure that unless you're working with black, there is no black in the image (trust me, it looks much better.) Save it as your character sprite. Proceed.
Step 3: Copying
Copy the sprite four times to make the down facing sprite. Tweak it a little so that it appears to be moving (there are some sprites where it may be worthwhile to just clone them exactly, but you've got to have fluff for that). The up facing sprite is the same thing with hair where the face is (usually, use your judgement), but you might want to consider doing a battler for the side as well. It's easy enough to create the second reel of side sprites as all you have to do is flip them around (individually. Flipping them all just creates more work for you.)
Notes: As this is a sprite that I'm going to be using, I did tweak the colours slightly, just in case you notice any problems. Also, there's probably going to be a better version of this sprite going in EWIII, since it isn't one of my best.
And that's about it. Pat yourself on the back and get some air