@310,279
n00b. Here's how to do it quickly in Photosherp.
1) Figure out the "pixel" size. (8x8)
2) Resize the image to 1/8 of the original size. (25x25) using nearest neighbour quality.
3) Hit crtl+shift+alt+S to open save for web and devices because shit is just that cash.
4) Select PNG-8, adaptive, colors: 16, no dither.
5) Down in image size, enter 200x200 and again nearest neighbour quality.
6) Presto.