I really like the overlay one. The effect is great.
It reminds me a little of Yoshi's Island. I could see that style working really well.
I like the art style for the character. I think it'll fit really well. I'm not sure I like the overlay though. The effect is neat, but I think it might clash with the cleaner background and its deemphasized textures.
trying out some filters, regular, outlined. and a few pixel variants.. thoughts? id have to run all game art through the filter... but shouldnt be hard to run them through....