ZDoom

I'm looking for a better image editor to replace Game Maker's in-built one (the one I use the most) for creating sprites.
Preferably I'm looking for a free one that supports these functions:

• Improved colorization (Like turning grey into red, something I can't do with GM's image editor)
• Handling transparent backgrounds and erasing background colors
• Improved resizing and anti-aliasing
• A bigger palette (supporting colors like orange and purple)
• Being able to preview it as an animation and save as .png strips (and load those strips to create an animation of subimages)
• A strip creator (for cutting large images into equally sized blocks)

I greatly appreciate any recommendations.

Paint.NET has all but the last two points covered. It is what I use most of the time and I would highly recommend it.

GIMP (Maybe plus G'MIC and GAP plugins) *should* be able to do most of that to some degree or another. Maybe not the strip view style, but it does have animation ability via layers. Free, very powerful. I like it, but it's not for everyone.