PixCen is pretty much a programmer's c64 art tool. It checks the rules of the selected screen mode as each pixel within each character is changed.
PixCen has no lines or circles or rectangles, just pixel editing and rectangular selection copy & paste. This is not a limitation as game assets are typically fairly small anyway, like font characters or sprites.
PixCen is created by Censor Design and is open source (PixCen on GitHub, Facebook page). The image in the editor to the right is not the fault of PixCen, it is a screenshot that has been forcibly reduced to c64 multicolor char mode in a custom tool made for the side project.
Sprite Pad is a specialized tool for c64 sprite animation. Feature wise it is not far from PixCen but with the ability to preview animation.
c64 sprites are either multi color where pixels are doubled or single color independent of screen mode (multi color or single color). Some games will overlay a multi color sprite with a single color sprite to increase the resolution of one color, unfortunately my project don't have enough sprites left over to achieve this.
SpritePad is available at http://www.subchristsoftware.com/spritepad.htm
In addition to PixCen and SpritePad Paint.net is also frequently used and starting to look into PixelFormer for square pixel stuff. There is also a custom asset converter to bring the data into the game, mostly through saving out the graphics as .png or .bmp.