If you select "edit" from the main menu you will be taken to a 16x16x16 3D grid. You should fill a large amount of this grid to create an averagely sized sprite. You can hit Triangle to edit the colors in your pallete, which can be selected with the shoulder buttons. If you hate the tedium of remaking your sprite block for block you can copy it to the different pose slots and then just edit what you have already made.
This is how your character will look whenever you are not doing anything else. It is your standard pose.
This is the first step in your walking animation. If your character resembles a human, it is best to have one leg stuck out during this animation.
This is the second, and last, step in your walking animation. If your character resembles a human, it is best to have the opposite leg stuck out from "Walking One".
This is the first motion your character executes during an attack. You should probably make this look violent.
This is the final motion your character executes during an attack. You may want to make this look violent as well.
This is how your sprite will look when it celebrates. This pose may also be used to add a cool, useless, animation.