Most of the great pixel artists from around here (Helm, Ptoing...) recommend
Cosmigo's ProMotion. I haven't tried it, because I'm using a Mac, but it is suposed to be the best pixeling application that exist at the time.
A great number of pixelers out there also like
GraphicsGale. I'm not very fond of it, but I haven't used it that much (only when I'm at my grandmother's house).
If you're using a Mac (because the previous two only work on
motherfucking son of a bitch Windows) you should try
Pixen. Has everything a pixeler needs (plus, icons/graphics made by Pep and Miguel, if I remember correctly). but crashes an awful lot.
I don't know what's up with your Photoshop, but I find it perfect for pixeling...I sometimes switch to Pixen, but it never lasts.
Hope I was helpful...