Nicely done!
Frankly, there are only two things that need work on this: Fix the background pixelation, and neaten up the characters. I have to say, even with slightly sub-par graphics, this deserved an award. I enjoyed the character design and the style, but my favorite part was undoubtedly the movements. Both characters move cleanly and quickly, and you use very few still tweens. When you do, you've got movement on the objects themselves, which keeps things nice and fluid. Good job!