Unlike my evil nemesis Watercolor, Photoshop and I get along just fine. ;)
Typically I will sketch my characters out on paper and then scan them and finish them up digitally. These are my most recent completed renderings so you can see what I work with when Photoshopping. If you have a drawing tablet you can draw your body and outlines pretty easily, but I prefer sketching them out by hand and then layering that scanned outline over what I've photoshopped to keep it from looking too clean and perfect.