For example, I will be drawing Inuyasha, because he was the first one of these that I made.
Step 1: Materials
A normal pencil
Photo-Manipulation software with a 1x1 grid feature (I use Paint.NET)
Step 2: Get the Pattern
Step 3: A Little DIY Work...
(For this particular step, we will instead focus on Sesshomaru's sprite, from the same game, because I didn't find any perler sprites for him)
If you cannot find a good perler sprite, then you'll have to make one. First, you need to obtain a good sprite sheet, which, unlike perler sprites, aren't a total pain in the arse to find. If you haven't already, download Paint.NET here.
Once you have it, paste in your picture, and take the Box Selection tool and copy the pose that you want. Get the outlines exact, because it will make it easier to measure the picture. zoom in until you can see it clearly, and then turn on grid view. Use this to copy to the paper.
Step 4: WARNING
For example. The warp pipe from SMB1 took up an entire page.
Step 5: Doing the Deed
1. Color in any black parts of the sprite with a regular pencil, then color over them in a black colored pencil
2. Color any grey parts in with a regular pencil, then leave them alone.
3. Color in any other parts using their color.