I'm going to promote and paraphrase

's journal / news article, here, since said article is a couple of years old, and because I'm trying to spread the word around...since the reports on DA get so backed up that none of the staff really get the chance to do anything about them, it would be best to try to let people know of what they're doing, why it's wrong, and yeah. Most people are just misinformed.
From her journal:
To be very clear, the official Video Game sprites which includes sprite sheets, animations made with sprite sheets, and any edits made of said sprites, are not permitted on DeviantArt at all.
Additionally, Video Game pixel art cannot be used as a base for original pixel art, such as Pokemon Trainers made from the official game sprites or classic Mega Man sprites used as a base for other characters. I know that many people put a lot of effort into their video game sprite edits, and some may look very original, but it still does not make it original art.
The fact is that if you do not have explicit permission to modify, publish and/or redistribute from the owner of the game in question, then you cannot upload video game sprite sheets or modified sprites to DeviantArt, even if cite your sources. Please remember that just because it is pixel art does not make it any less important or serious than other form of art. Please give pixel art the respect it deserves by removing any video game sprites, edited or not, you have uploaded.
You can find this journal here:
[link]This basically means that you cannot post up any direct edits of any official video game sprites on DeviantART. No, custom pixel art is fine, of course. Also, assuming you have gotten some sort of direct and clear permittance from the original artist, saying that yes, you CAN directly edit their work; then that is also fine. Video game companies, however, tend to have no clear terms.
Using edited pixel art for icons is okay, apparently. Just not as gallery SUBMISSIONS.
Albeit editing video game sprites is TECHNICALLY illegal, people will do so anyways. I totally understand that, and I really have no problem with that. After all, why would a video game company want to waste their time and effort suing thousands of kids who have edited graphics and images from their productions? It's redundant. But nevertheless, DeviantART clearly states in its terms that the majority of direct edits are not allowed.
Fanart and derivative works? Don't worry about those, they're fine for the most part. They're not DIRECT EDITS OFF OF THE ORIGINAL WORK. Keyword: DIRECT.
Now, it's a totally different story with traces of official artwork. I am unsure entirely about traces, since--especially with pixel overs--you are not actually editing DIRECTLY from the original art; rathermore, you are making an altered copy.
Thanks for your time and patience. In the meantime, I think I'll give anyone who has edited Pokemon sprites in their galleries friendly little reminders, linking to this, armaina's journal, and the FAQ pages that correspond to this.
Sorry if I seem to contradict myself a bit here, though. I suppose that's what I get for not looking over everything / being somewhat rushed.
FAQ #8: What are violations of the deviantART copyright policy?FAQ #157: Can I use things created by other people in my submissions?FAQ #306: Does "Crediting" let me use whatever I want?