Just a cool little animal/pet thing ive been messing around with for a while, it's Blobby 2.0 because the first time i tried pixeling it, it was awful and got ripped apart on the forums. Anyway i went away, worked on the idea a bit, read a few tuts and heres the final product :D
The one on the left's my attempt at AA'ing it.
EDIT: i upped the contrast between the shades and did a new background for the small file. The background stil needs some work i think though.
Discussion
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With a piece this size and simplicity, I don't think dithering is the answer. Upping the contrast and hue shifting, however, are some options worth looking into.
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