full resolution image shrinking

You can do this already, just not as pretty as he does it because of the lack of anti-aliasing. Just make a canvas that is big enough, then draw your sketch, copy it onto a new canvas and scale it down to the size you want. There is no point in bringing anti-aliased brushes from photoshop into PyxelEdit because they're not meant for pixel work.

As for the scaling, I think Danik is using the RotSprite scaling algorithm, for Pixel art that's the best thing you're going to get as far as I know. PyxelEdit uses the Nearest Neighbor algorithm, which is meant for pixel art. However, no matter what algorithm you use, the amount of details you can see from your sketch depends on the size of the canvas. You can only scale something as much as there are pixels, so if your canvas is for example only 32x32 then it's limited how much detail you can cramp into that size.

There are multiple free programs you can use for sketching such as Krita, FireAlpaca, Photoshop (not free), Gimp etc... Just make your sketch there, then import it into PyxelEdit and scale it down. ;)

My personal favorite freeware for scaling images is Paint.Net

You can choose between Nearest Neighbor (for pixelated scaling) and more fancy algorithms for high quality scaling (for not pixel-art).

Then as CandyFace says, just save it then import it to PyxelEdit for tracing.

i have had very wierd and bad results from scaling in pyxel edit. not at all what i would call the best, such as some cluster of pixels bubbling out as i scale up and the likes. the reason i request this is because once a picture with a good resolution is scaled down in pyxle edit it loses alot of detail that is hard to see when your tracing over it. (in short i want to be able to make a small full resolution picture to allow better tracing of my sketches)

Scaling up is never as ideal as scaling down because the algorithm has to add resources to the image instead of just removing them. This is much harder for the computer to predict and you therefore often end up with a lot of cluster pixels or artifacts. It is however more forgiving to scale up a hires image than a sprite of 64x64 pixels but it will still be noticeable and is it still not ideal.
It is not possible to make a small full resolution picture, as I said before, the quality of your hires image when scaled down depends a lot on how big your canvas is. For example if your canvas is only 64x64 pixels, then you will only able to get 128 pixels in total to work with.

What I sounds like you want instead is the ability to change image interpolation, eg. changing from Nearest Neighbor to Bilinear or Bicubic

it does happen though that you've made a sprite and it's not big enough, so you decide to scale it up. For times like that, there are tools that can help you, although you'll still be required to clean it up afterwards. The tool i've found to work the best is called PixelPunch

I'm referring to this page because the artist talks about the software, so I don't have to ;)
http://www.alonsomartin.mx/hfa/2013/10/30/spriting-tips/

As for the scaling:
PyxelEdit uses Nearest Neighbor because it is intended for transforming and scaling without adding any interpolated values, since we want to be in full control of all the colors and information we see. You can see an example of the two interpolation methods below:

Nearest Neighbor
Pros: It is pure (no color interpolation) and therefore uses all the colors that was initially picked, I would therefore be able to clean it up and work with it as it is.

Cons: There's a lot of artifacts and a good amount of the details are lost.

Image scaled in pyxeledit:


Billinear
Pros: More details can be distinguished, even from lower resolutions than the source. (There are more but this is the one that seems to fit the topic the best)

Cons: because of the interpolation, an enormous amount of extra colors has been added to try to stay as close as possible to the source image, it therefore be faster to trace or redo it from scratch rather than trying to remove all those interpolated pixel values.

Image scaled in Photoshop using Billinear interpolation
 

source image:

It sounds like what they're asking for is the ability to place a background in the workspace at a higher resolution than the working layers. That way they could have something like a 128x128 pixel image behind a 32x32 layer that they're drawing on, to then trace over.

yes. what antialias85 said. thats what i want. I dont care about the scaling necessarily, just was adding that as a point. antialias85 described what i wanted 

also. i skimmed the long explanation (very lazy, more for giving long explanations then listening to them), but i think photoshop has the better scaling algorithm. keeps details and accurate color. id rather deal with more colors than... what ever your pyxel edit example was :/

also, dose the actual programmer of pyxel edit ever reply? seems kinda cold to send his mods, or admins or whatever to answer questions in such a small community. i know hes busy with college and what not but it would be nice to see some interaction from this forums equivalent of a deity... does that make you Moses/ jebus, or would this be a polytheist pantheon?...