I was working on one of these, started 2 weeks ago, but forgot about it.
Tried to go back to it yesterday, as I remembered about it, but everything I did for it looked rather rushed, and ended up feeling ill from a cold I was carrying since a few days ago.
Anyway, I'll just post the wip of what I had.

So far it only uses one palette row.
The road tiles were made multi-tileable for creating different cracks and effects using the less amount of tiles.
Anyway, good luck to everyone that is participating.
I would contravertially say that for me this is hands down the winner... even though it's not completed - the choice of color pallette, the placement of pixels I can tell immediatly that panda has underlying skills that I believe are close to professional... with respect to background development that is... well done panda!
I think this is a tremendous effort, Just superb... I love the fact he's managed to develop the cracks so that he can create 4 varying types over a larger 2x2 tile area - that shows skills with understand tesselation as well as being economic with the character coun - I love the end piece on the brick work as it juts out into that gap... the way it sticks out to 'counter' the obviousness of the tile boundaries, which I feel a lot of the others here don't successfully manage to remove.
Finally, I love the painterly subtle style - notice the lack of intense dark colors (such as black) this pushes the background INTO the background, which allows game sprites and any HUD to stand out on top of it... which is good for gameplay. - I always prefer backgrounds to be less saturated and less contrasting.
Taken to it's ultimate conclusion I beleive this would really suit a "modern" beat em up game that was perhaps based on something like justice league or the x-men... or the mutant turtles... Particularly with bright vibrant 'cel shaded' style combatants over the top of it...
Plus he's only used 1 pallette row so far...
Simply Stunning.
Vedstens work is also great. nice pallettes, Entry A & C particularly... I think B could be desaturated and the contrast reduced slightly also... but that's personal choice. (See my comment above)
out of the three I'd rank them in order of merit - A 1st, C 2nd (purely for it's simplicity), with B 3rd ... mainly because of the contrast and choice of colors set's it down a few pegs.
All in all though a great effort.
I also think the texture in Vierbits offering is really nice... personally I prefer the more flat color work but your work is excellently done and also quite professional. It has elements of Metal Slug About it... (praise indeed)
Another good pixel pusher. Well Done Vierbit.
With regards to those of you who think I'm being harsh, I apologise - I've been on these boards now for 3 days and I'm still yet to gain the 'vibe' of the place so I'm sorry if I've offended any of you.
However - having said that - I do have a significant understanding of this medium and this format particularly and In all honesty I'm making these comments in a bid to help you all understand the rules of this contest and ultimately win it... as adam points out, those of you who have illustrated their choice of pallette are the safest - I'm just a stickler for pallette management having stayed up to the early hours on too many times to mention, correcting pallette errors that my old art team had incorporated into their work...
But I get your point about the fun factor and I'll bear it in mind in future.
Thanks and Good luck.