Looks like your presentation is incorrect. I'm seeing 256², 256³, 512² and then 128². Why are you not including the UV/tex in the presentation?
katzeimsack - I'm not fond of the green painted in the jeans holes. Why not use alpha?
Seyhk - you can push that texture much, much farther.
lean - the color count is per sprite, or in this case, per texture. Similar to the way old games used several sprites to compose 1 character (sorta like this
), you could use several texture planes. So for instance you could lose the white on the club and swap it for a medium grey which would be of more use at the 'ball' of the club.
Besides, you mentioned it yourself, there were actually 4 colors per sprite. I'not seeing you use any transparency, so why not use all 4 colors?
gungriffon - fruit fucker?
Delko - what's with the inconsistent texel size?
Mr_Drayton - you could partially fix your alpha issues by working with denser sheets. This would also save you a few polies and some overdraw (does overdraw even apply to alpha test?).