That was awesome!
I love the progression of it. It starts off, as any other decent sprite movie. There's with two characters fighting each other retro-game-style. But the complexion of everything increases more and more until the quality of the movie reaches, well, almost something that could be shown on the TV, if you get what I mean. :) I liked how you mixed in some regular vector graphics at some places too, and the ending was just hilarious.
For a first one this is great. You really got some talent there. Great work!