I'm terribly old fashioned, for these avatars I used a 2.0 calligraphy pen on paper to do the outlines. After scanning the drawings I coloured them with an ancient version of ArcSoft PhotoStudio 2000 (from 1999 - wouldn't recommend it) - it came free with my equally ancient scanner. After resizing to 120x120 pixels I used
Pro Motion (a very nice commercial editor for doing pixel graphics and animations) to make the avatars transparent and touch them up a little where needed.
Edit - added bigger versions of two avatars so you can see how they looked before I shrunk them: