Normally I'd say "use as many colors as you want" as I'm not a die-hard restricted palette pixel artist.  However ... you've mixed high-color with low-color and that stands out too much for me!  The belly overlaps the arm with the sword ... the belly has a lot of colors where the arm appears to only have two levels of shading.  This style clash takes away from the image as a whole!

The animation is cool.  Who doesn't love a chubby man with a sword?? :)

Thank You..

Bg Transparent n contrast increased... Keep those valuable suggestions coming..

I'd recommend removing the white background in favor of a transparent one.  iaza.com has a tool to do so if you don't have the appropraite program.  This is quite good, but less colors and more contrast would help the pieces a lot.