I use Corel Photo-Paint, but you could use Photoshop or Gimp or whathaveyou. Just painting pixels manually (although masking and colour-select tools can help). Its hard to say how much time, I already had tons of sprites I made for DaftNES IV. To guess, so far its been about 1/3 drawing new sprites, 1/3 fiddling around moving and placing things on the map (again I use Photo-Paint for that, not sure if you can handle lots of floating objects with Gimp), and 1/3 writing up the events. Also, apologies no update yet, tomorrow hopefully!