I was going to mention Animal Crossing. There must be some programs for that. At 32 x 32, aren't they also the same as Windows icons? (*is too lazy to look*) So if not for the limited palette, there might be easier ways to translate your pictures, as if cropping to a square and then resizing to 32 x 32 and then blowing it up again without alteration in nearly any image program wasn't simple enough.
(I remember that Animal Crossing site! Wow, they still have the 16 icons that I originally made for my own web site! Good times...)