I start off with a white background layer (so I won't have to look at the annoying transparencies.
I then add a new layer. Using the brush tool with a width of about two and a light blue color (I'll tell you why later), I draw the basic outline of the figure I'm making. Just the figure. Not their hair, clothes, or accessories.
on a new layer I continue using the brush tool, this time drawing a basic outline of the clothes that surround the body, paying close attention to detail but not concentrating too much on making the lines perfectly smooth. The brush color for this layer will be pink. The reason I'm using different colors is so I'll know what I'm doing when I go to do the line art in black. (which are the lines you see in the final version of the picture.)
At this point save frequently. Especially if you lose power a lot like me.
Once you've got the clothes down, add a new layer and do the hair in a different color. Like green.
Once done with hair, the final layer will be the face in a color you haven't used yet. Make sure you're still using the brush tool.
Once you've got all your basic outline layers, add a new layer. Select the line tool with a bold black color and 1px wideness. Make sure you make both ends of the line rounded. Use the line tool and trace the lower layers and add a few details. Make some changes that deviate from the original plan if you like. This will be the final outline before you start coloring. Take advantage of the bezier curve (right click line nubs instead of left clicking them) option to get the smoothest lines possible.
Save this file as the first phase of your drawing. Save it as a PDN file.
Now copy and paste the black outline into a new file. This will be phase 2, the texturing phase. (phase 3 is finishing touches and adding background)
It's hard to explain how I color. But I basically color and shade on a different layer than the outline. Every texture layer is separate (one for hair, one for shading on hair, one for tie, one for shading on tie, one for pants/jacket, one for shading on pants/jacket, etc.). And almost all of the texture layers minus the hair (which I wanted to look fuzzy so I put it above the bold outline) are below the outline layer. This is to prevent giving the lines an aliased look and so you won't have to spend as much time smoothing out the edges of your textures.