We are big fans of pixel art here at digital urban and the video below provides a great insight into creating pixel art in MS Paint:
Pixel Art Villa Video
You can create a similar effect using SketchUp – see our Isometric Pixel Art – Simulating in SketchUp Tutorial but MS Paint is much more satisfying to go for that original look.
If you like pixel art take a look at Edushi.com – Possibly the Best City Maps in the World? – a must see.