I'm going to post the steps I took in developing the squirrel character I made a few days ago. So check out my Drawing Board for the blow by blows.
So I drew a bunch of Squirrel heads before I finally liked this one (I dig it's buck teeth!)
Next, I worked on a body that I thought would match the head (sometimes that's the way it goes-in pieces! I test drive a few drawings to see if there's a better match.)
Then I ballanced out the sizes of each drawing in Photoshop and put the two together.
In Macromedia Freehand, I redrew the character and filled in the basic colors and gradients.
After that I added the shadows with a darker percentage of the basic colors and put in the shine high lights.
I found a great dot pattern to use for the background, put in a shadow underneath and added the finishing touches to the redraw to make the drawing more 3D.
Finally, I made a PNG of my Freehand Squirrel and brought it into Photoshop to put the line drawing on top of it- which sharpened up the whole character and gave it some depth. And there you have it!