The pixel tool allows you to create fun retro 8-bit video game style graphics. It's got a lot of flexibility with its settings though which allow you to achieve a lot more too!
To get an idea of what's possible with Pixels tool here are a few of the 2012 SketchClub Awards nominees in the Pixel Art category.
You can change the shape of the pixels to achieve different effects.
Inset lets you shrink the pixels down in size while keeping the same spacing.