On the character=
I like the design so far, also the colors and how they are used. I found a few small things that look a little bit weird and out of place... the feet for example, maybe make it look like it has them, right now it looks like he doesn't have any feet, just legs, but no feet. On another note, he is holding the tip of the handle of the sword, which he should grab the sword from the handle... crap how can I explain... do you know what I mean? shift the position of the sword "down-left" about 2 pixels so it looks like he's actually grabbing the handle propertly.
On the bg=
Sorry can't really help you with this, since I don't know much about making bgs. Someone else will help with that.