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Thick lines aren't necessarily a bad thing. You could try colouring them--darker red lines for the hair, a darker skin-tone against the skin etc--as that would soften them up a little. Otherwise if you wanted to thin them out I think you'd have to redraw them on a separate layer using a thinner brush.
As for shading I'd keep it simple. You've got some nice detail in using line (the top and the skirt are nice) so I'd start with simple blocks of darker colour to get some shadow in and then see where that takes you. It's surprising how quickly a couple of shadows can create something more 3D. :grin:
Thanks for the reply, I might put a new layer over top and redraw the lines. As for shading, could you be a little more specific what you mean by "blocks".
Hey, as a quick note, save your BMPs as PNGs before uploading them to Photobucket. Otherwise, PB converts them to JPG and artifacts the shit out of your work, which looks terrible.