Section 1 - Choosing An Application
Paint.net
http://www.getpaint.net
Now, Paint.net is great for what we need to accomplish, it can be used for a great many things too. It's not as powerful as Photoshop and GIMP for all of the fancy stuff but when it comes to what we need I believe it to be better. Although again this comes down to personal preference!
Graphics Gale
http://www.humanbalance.net/gale/us
This software is great for animating our sprites and viewing the progress in real time. I will use this in other tutorials but for what we need right now with isometric environment tiles I think it's best to keep this out of the equation, however I often use it to animate my environment tiles once I create them in Paint.net. With Graphics Gale, it's free to use but if you want the feature of exporting animated GIF's then you need to pay a small fee for the pro version, this is easily done outside of the application once you have your animated sprites completed though so you can bypass the requirement of paying and just use the free version.
Aseprite
http://www.aseprite.org
now this is just like Graphics Gale, but 100% free, it does pretty much the same thing as Graphics Gale and I may use this in future tutorials just to try and allow people see my workflows in each application so that they can get a better feel for each and see which they like best. (Some people prefer Graphics Gale over this, I like them equally)
GIMP
http://www.gimp.org
I'm sure by now most people interested in creating graphics for any reason, be it a game or just to create art knows of GIMP, ultimately described as the FREE Photoshop. Honestly it's a really good application but I prefer Paint.net for my static pixel art.
Pyxel Edit
http://pyxeledit.com
I don't think this gets as much credit as it should, it's a VERY good application for creating pixel art, it has a good few features for creating seamless tiles but it does have a few bugs right now, or at least when I used it last, I have this on my computer and gladly use it.
Pickle
http://www.pickleeditor.com
Just like the above listed, I love this little thing, I also think it's under credited but I recommend you look into it and the above at least =] The movable warping canvas helps a great deal! I will likely use this in a future tutorial too...
Photoshop
http://www.adobe.com/products/photoshop.html?promoid=KAUCA
As with GIMP, I am almost certain most individuals know of this application, they offer a subscription based license now as well as the standard license which you have to look around on the site to find now. Personally I think getting Photoshop FOR pixel art is overkill at its best, but if you use it on a day to day basis and already own it, I think it could be good to use as you know the ins and outs of the application already.
Pro Motion
http://www.cosmigo.com/promotion/index.php
Now this is a nice application but it does have a price tag on it, I cannot say much for this as I don’t own it... It looks pretty good and I've used up my trial a short while ago, it's worth downloading and looking over, I just can't afford it right now =\ lol
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Now that we have a list of applications to go on, I want to say that I will be using Paint.net which you probably gathered, I decided when I was typing up the list, here are my reasons for using this:
It's FREE
Easy to use
Easily obtainable
Lightweight
It has some great features
Now that you know why I've chosen to use this application you should know that it might not suit everyone's needs, I'm choosing this with static tiles in mind, you can then export your tiles into another application for animating or you can attempt to create such animations on separate tiles within Paint.net which I will cover later, but you don't have to use this application by any means and if you're choosing to use something else you should skip the next chapter of this tutorial as it's based on setting up Paint.net with certain plugins that will make our life easier. I do suggest you go through the next chapter either way though as to understand what you may need to do to prepare your application of choice.