This is a pic I did several months ago for a buddy of mine, Hedgie. As you can probably tell, he's a big Sonic the Hedgehog fan, and he's been slowly getting me into the fandom as well. These are his fan characters, Strider the hedgehog and Ace the fox, who comprise Team Seaside. They play beach volleyball, but whenever they're not doing that, they like to just hang out at the beach like they're doing here.
As far as technique, I start by scanning in a rough pencil sketch. I like to produce my vector lineart and cel shading in Inkscape and then export the lines and shades into Photoshop for coloration.