you can actually use flash to make your sprites, you could even use the objects and symbols from your previous flashes.
size the character appropriately and choose a bg color that doesn't interfere with your sprites pallete (like pink or bright green)
just position the character in each frame or draw new ones if needed (you could even use tweening for smoother movement)
then go through each individual frame
and just file, export, export image as a bitmap (make sure that the smoothing box ISN'T checked (that will keep your sprites from blurring)
do this for each frame needed for your character
just make sure they aren't too color-complicated otherwise this method doesn't work too well and requires alot of hand-editing.
it seems a bit weird but it's really helpful and sure beats making original sprites in MSpaint, which can be a real pain sometimes.
hopefully this made sense to you, I could probably make a detailed tutorial for you if you wanted to fully understand my method.
MrMurdoom
Dude I freakin Love mugen!