Arms and legs move opposite one another. Left arm forward + right leg forward. Right arm forward + left leg forward.
The noise does make the motion hard to crit very well.
The sprite itself is interesting to me in that it poses an odd challenge: Manny was designed to be a stylized 3D character, and he has a very simple, iconic sort of look. Trying to get that likeness with just a handful of pixels will be difficult - especially if it's just black and white.

The mouth is a pretty significant feature, as is the size of his eyes. I don't think the likeness is there on your sprite yet, and with anly about a dozen or so pixels to work with vertically you'll probably want to do some experimenting to get some proportions and shapes. I'd suggest a midtone or two so you can sort of fake some of the facial stuff like so:

Top row = square shapes
row below = same shapes with two midtones that act to round the shape (I'm half asleep and forgot a couple of shapes you could try, like "+" shapes and such)
and obviously there's my own attempt. I'm still just learning pixel art as well, so I'm just throwing out ideas. More a front view than profile shot, but I tried to give the facial shapes' proportions similar to that in-game shot up there. I think the size of the eyes and a larger mouth shape are the best spots to focus on to hit a decent likeness.
You also probably don't even need a neck. Just sit his head right on his suit and maybe have a little overlap there during the animations... instead of having the head drop, tho, you might want to have the whole body rise and fall for each step (evenly, not just one frame per step).
Sadly, I have only ever played the demo for Grim Fandango. I liked it, but at the time i was without my own computer. Perhaps I will find a used copy via e-bay or something and give it a shot. I loved that Manny would look at the things he could interact with. I wonder why more games didn't steal that feature and avoid the pixel-searching of most adventure games.