Thanks for the comments so far. I'll be getting back to work on this today, after a weekend in the sun.
Stealth, the textures are all pixeled. Hell, at 32x32, there's not exactly a whole lot of room to use anti-aliased brushes.
Grass is still wip, but I've gone through a number of completely different iterations to try and find a good balance of all the various aspects, from contrast to saturation to level of detail, though I admit that the amount of tiling is a bit painful. Which aspect hurts your eyes? Brightness (I accidentally overbrighted the lighting in the render but didn't have time to fix it before leaving the house)? Contrast? Level of detail? Saturation? Some or all of the above?
The graphics look somewhat like graphics from Runescape. 
I hope you're not implying I ripped graphics from that game. I'll assume you're talking about the level of detail, since the textures (especially for the ground) look nothing like runescape's (ground textures are, from screenshots I've seen, effectively single-color with vertex shading). You may not be aware that the DS has a hardware ceiling of 2048 polygons, which is not a whole lot to work with. Careful allocation of polygons is paramount. Put another way, I'm not exactly going to be pushing anything "next-gen" on the DS.
Xion, I guess you're referring to the way the limbs get larger towards the ends (as opposed to the pose the characters are in in the early shots)? That was a bit of a stylistic choice helped along by the much lower polycount I'd be used to (100 vs, say, 300 and up), since it helped define the silhouettes nicely. I'd be open to changes, though, so I'm looking forward to your critique.
TakaM, I'm planning to have a semi-controlled camera, in that you will be able to rotate the view in 45 (maybe 90?) degree increments, but not be able to zoom out past a certain distance (primarily to keep the polycount under control, but also for the reasons you mentioned). Pixelled textures can work and look good, though (see some of the recent Final Fantasy games for the DS), as long as you keep an eye out for overly-contrasty and -detailed textures (since those will get very noisy). On that note, my grass is probably overly contrasty, and I may have to hit the drawing board again to try and get something more akin to the grass in FF12 Revenant Wings (as opposed to something like Chocobo Tales, which has a much tighter camera zoom).
As for larger textures, that's not really going to help a whole lot, since the 32x32s will map roughly to that pixel size on-screen at the intended zoom level. Any larger, and you're looking at wasted pixels on the texture, and more importantly, wasted texture memory (of which the DS has very little).
Blurring the scene would basically not be feasible during gameplay, for various reasons. One is texture memory (you'd need to screencap in order to post-process the blur), and the DS doesn't have, as far as I'm aware, hardware support for blur, which means you'd need to do it in software. Long story short, it'll be slooow.
Vellan, I'm very familiar with Ken's work, both 2D and 3D, and I'm a big fan. However, I'm very much trying to toe the line between stylised and realistic while keeping within my strict poly-budget. I'm curious to learn what you mean by the models not reading, as for the most part I've gotten fairly good response about the readability of the characters at that size (roughly 50ish pixels tall), but any suggestions you may have would be appreciated.
Zee, depends on whether you're looking for a high-end app or a low-end. Milkshape would be an option, though I can't stand the app myself (has plenty of export options, though). Blender's another option, though there's no way to disable texture filtering in the viewport (just render without AA, which is where all the textured shots in this thread are from). The high-end apps like Max and Maya allow you to turn off filtering in the viewport.