Ah, is that reversed anti-aliasing?
Not necessarily. reversed anti-aliasing is when you use a medium between two colors on the inside to make a smoother appearance, rather than on the outside to give it a smoother outline. And with a piece this small, anti-aliasing outside the subject would be pointless, mainly because it resembles a sprite, and sprites are on many different backgrounds, and therefore cannot be anti-aliased (effectively).
Pillow-shading is when the lightsource is undefined, or rather, right on top of (not in the sprite's perspective, but rather, from the players eye) the sprite. This means that you have just taken the darkest shade and put it on the outline, and worked your way in gradually, putting the highlight in the middle of the object, rather than at a defined angle.
So, I don't really think you have any pillowshading going on here, but there isn't exactly one defined lightsource. The light hitting the shoulders seems to be coming from the top right corner, while the light hitting the chest seems to be coming from the left. Since the armour is metallic it is easy to pass it off as ambient light and not another lightsource altogether, meaning that the light coming from the top right has bounced off some object to the left and is now hitting the player at a different angle...
Ah, but now I am slightly rambling/overanalyzing.
@cave: thanks.
