I have saved it as a jpeg before and png.
I want to thank you all for the info and help. I am going to work on the sword and shield just to help me practice pixel artwork more and will show the edit. And then moving to another project. Thanks again ;D
Feel free to use my edit to work off of, ....
I'd take the dithering out. People think because its pixel art that omg it *has* to have dithering. But unless you're going for an authentic retro look or you need it to imply some sort of rough texture, then in my opinion dithering should just be left alone.