I tried Photoshop for pixelling a few years back, but a lot of little things about it annoyed me. If I remember correctly, the single-pixel pencil was hard to work with in that its cursor didn't line up very well.
@Complex: WTF?
you should use photoshop for making transparency, its a great software to pixeling also!
I Pixel Arted A GameBoy Recently And It Was Better Then This And it got rejected.