Heh I'm happy that at least my edit is grounds for technical discussion. I'll try to adress a few points, and agree with others.
I know I'm a barely-double-digit-post-newb here but I think the edit above is downright sacrilege.
Check your holy cows at the door. This is commercial critique.
yet you add dithering to make it even more so
Hm, yes. It's a bit of a give-and-take. I decided to try it in a few places, in order to have on one hand a bit more texture - which is not good given that the detail on this piece is overkill to begin with - but also have a bit more hue-variation, which this sprite sorely needs. There's a general art credo that applies strongly in here:
you can't have everything. You have to sacrifice one potentially good thing to get some of another thing. As far as clarity goes for example, an 1bit sprite with no dithering and very strong planes would read better than anything else in the universe. Yet you don't see DDP being in 1bit, right? So they sacrifice some clarity to have color in there, then they sacrifice some color variation too for clarity, so on, so forth. A game designer prioritizes what he needs and creates a hierarchy which he gives to his art team. I bet the DDP hierarchy was:
1: THIS IS A MANIC SHOOTER. CLARITY MOST OF ALL
2: colorful design, not 'gritty realism'
3: technobabblish machinery
or some-such. My edit puts chromatic cohesion a bit higher than clarity, and obviously that would hurt the gameplay. But would it hurt it to the degree where you wouldn't be able to identify the ship against a -similarly Helm-fixed background? - probably not. I wouldn't edit a single ship and put it in the game, I'd have to edit all the art in there to make it work in unison.
Selout is evil if you're not in control, but there are plenty of games that use it to a great advantage. So common knowledge shouldn't say that don't use selout, but use it only if you know what you're doing.
There is nothing that selout does that you can't do with light-weighted outlines and controlled breakage of such. All-around-paper-cutout-selout is the devil and you won't be able to change my mind, nor will anyone else. I will concede ptoing's point about the extra darkness under the small wings, and I could go back and edit another line under there but it's a simple edit one can imagine just as well without me actually doing it.
Actually, i dont think that edit works.
I am not extremely enthusiastic about it because my eyes rebelled against what I was doing as I was doing it. I have played DDP for so long, it's so difficult for me to see the art in any other way than how I've seen it up to now, but it was actually good psychologically for me to say 'forget what you've known, what would you do?'.
Its pretty much a washed out version
Comparatively to the original. That's the thing,
any sort of edit would look odd to a DDP player because of the effect I described above. Try to look at both of these side-by-side and pretend it's the first time you see both, and tell the artist which you think would work better stand-alone (as I said, in-game in a game you already know is unfair since I'd have to edit all the bg art as well to have a fair comparison).
when you need to have a fair share of contrast
My edit actually doesn't mess with the contrast almost at all. It messes with hues, and saturation. As far as how the eye would read the levels (lighest, light, dark, darkest) the edit is pretty much the same as the original. There's less warmth, and that
does push back the sprite as far as priority goes a bit, but would it do so to a game-breaking degree? I think probably not. Would it do so if I theoretically had my way with every piece of art in the game? Nope.
Like most have said before, and i say it again for those that havent played it; You dont lose vision of the action on the game, the background plane stays exactly where it should be, backed the fuck up.
Actually that's not exactly true on level 5. The enemies and the background do bleed over each other there. What ALWAYS remains on top however, is projectiles. You can see all the BRIGHT, PINK, RETINA-BURNING BULLETS very well at all times. But let's not pretend we can see the ships here:

as well as we should.
Also, Helms edit of the "evil selout", makes the enemy ship blend more with the background, add the washed out pallette, and you got a gameplay killer right there.
exaggerations!

Sorry Helm, I quite like it as a standalone
It wasn't supposed to go inside the original game, all the art would have to be readjusted to degrees, as I said. Oh man, don't make me edit the colors in a whole screenshot!
Also AA is barely (only on VERY VERY specific ocations, and not with the purpose that we commonly give it
actually I think this isn't so much an artistic choice, but a choice of necessity to keep pixelling fast. All the 45 degrees to avoid AA. It's just faster work to not have to buffer curves and such. I do feel however that highlighting around every hard edge from every angle is overkill and leads to a bit of the 'embossed' feeling I mentioned. Only the edges that catch highlights from a supposed topwards lightsource should be brightened. Then again, DDP has a lot of rotaty sprites, so again this is a good choice from necessity. You trade some volumetric clarity by making everything embossy, but then you can rotate the piece and it won't have any irregular shadows.
edit:
newest version with adressed points
