- The HUD 2 is in .jpg format. This image format works fine in Java, but isn't ideal for sprites. OK for a background, but the problem is you (the artists) don't have 100% control over the color of each pixel. If you want that, I suggest using the PNG format, .png.
- The Don donut is cute. If he's going into the game, an animated gif isn't easy to work with. Can you give us a sprite sheet in .png format?
1. Use .png(PING) format for image files.
2. Sprites should be the size in the file that they are intended to be in game (it's not easy to scale them).
3. Transparent pixels should be indicated by a specific color (this is a little more reliable than using transparency in the image editor).
4. Multiple images for a sprite are most conveniently placed in the same "sprite sheet" file, but this isn't necessary -- one animated sprite can utilize images from more than one file. The sprite sheet file can be organized in any way.
5. It's fairly easy to flip and rotate sprites in the program, so there's no need for the artist to create these extra versions.
6. There's an example of a few sprite sheets and a Java applet that uses them at http://ucigame.org/Gallery/Arrownaut.html (if you see a big black border, that's a bug I'm working on).
7. One sprite can be put on top of another sprite to ease the artists' job a little. As an example, look at http://ucigame.org/Gallery/BounceHouse.html -- when the little guy bounces into the big X his eyes turn red; this is done by temporarily putting this image: http://ucigame.org/Gallery/images/et-red-eyes.png on top of the regular green-eyed one.