Please only post freeware. Thanks guys!

I often use MS Paint, GraphicsGale, and the Gimp.

I use the Gimp, but then again I don't draw sprites by hand I just edit pre-existing ones.

AllegroSpriteEditor had too many bugs last time I tried it (somewhat recently) for it to be really useful.

GIMP here as well. Lack of artistic skill is a bigger show stopper than any other parameter.

I don't use freeware anymore since I couldn't find a program that could quite cut it. I ended up with ProMotion, which is fairly cheap. If GraphicsGale is free now it's not bad. Photoshop and MSPaint work in a pinch, although you have to be a little fancy with Photoshop for pixel editing (and I guess it doesn't count as "freeware" though did come bundled with my tablet ). I find the GIMP unusable but some people like it, I guess ....

This guy .

There's also Paint.net. It takes some getting used to, but is okay for working with translucent png's and has minimal support for working with layers. One major gripe about it is that when you move a selection around the canvas, anything outside of it is destroyed, and you can't grab layers and reposition them without the aforementioned selection process.

RenderA is a nice start, and I hope it's still being actively developed.

I like Microsoft Picture It! 9, but it's not free, and doesn't have the best drawing tools, but it's got some really cool filters, along with rgb level adjustment, very good layering support, some good distortion tools, and other goodies. I got it fairly cheap for $10 at nothingbutsoftware.com, but I haven't seen it anywhere for a while.

For sprites, I usually use MSpaint, but my pixel art is not the best with small sprites so I start larger with other programs and then reduce them and tweak the pixels.

I use a PPS CS2 for all my graphics development.

I use MSPaint. I do use Photoshop for some special effects and stuff, but always MSPaint for the basics.
There are some features lacking in MSPaint (transparency?), so I'm kind of half-looking for a new editor. I tried the Allegro Sprite Editor, but I remember not being able to figure out the UI or keyboard shortcuts. The GIMP and Photoshop are generally too "advanced" for simple sprites.
Not to mention that GIMP crashes a LOT.

That is true, but it also depends greatly on how large your sprites will be.
Sprites made with any 3D app won't scale down well, you lose details like eyes and facial expressions quite easily.
If you don't have such small details though, Blender is great for sprites!
Here's one I made a while back.

You can always hand-edit the animations though. I've made a lot of small sprite animations that were made in Blender, scaled down, and then edited slightly for great results. Depending on how you work and you personal talents this may be faster or slower than making it from scratch in pixel-editing software, so it requires some personal experimentation to see what works best.

You're all gay. I use notepad to create mine

paint.net
gmail (Yes, I use gmail for making sprite. From:Mike To:AnyPainter Subject:MakeMeASprite ;o)