I fixed the eyes and the fringe, you guys were right about the left eye being too high. I've changed the purple shades to blue as well, but I'll have to go back and fix up the background blocks that were using the purple shades. I guess I used those particular colours because they mixed well with the greyish shades.
In any case, this is how the character is looking at the moment. The game will feature a boy and a girl character collecting fruit and killing nasties, similar to Tumble Pop or Diet Go Go in the arcades, although it won't be a ripoff of those games. Also, the characters will be able to collect different costumes in the game, which each has a different weapon, so this default look will change pretty quicky through the game anyway. What I would like to do is somehow make the skirt look more like a skirt and less like bike pants, if anyone can suggest something.
As for her build, the look I was going for is what is called "Super Deformed" which is a common Japanese art style. It makes an adult or teen character look short and cute by making the head larger and the body more stocky. Arachne, while your sprite looks nice and 3D, the softer, cuter look that I'm using is intentional. Also, the character won't be wearing the same costume as Cammy in our game, so any work I do on my sprites won't be on that model. Also, all the sprites and foreground blocks in this game have to have a dark outline around them,so I've gone for the darkest shades rather than black, which looks too contrasting on the backgrounds.
This is an example of Japanese Super Deformed artwork -
http://www.bythegoddess.com/images/fanart/cammy-pinup.jpg - It's Cammy from SSFII (my girlfriend's favourite character, which is why I drew a Cammy costume on the sprite in the first place).
