I'm glad you asked! :)

I created it in Adobe Illustrator using a gradient mesh: http://i.imgur.com/kuuFVO2.png

Illustrator's gradient mesh tool lets you create a grid of points where you can choose a colour for each point. I overlayed the grid onto the sprite and estimated the distance at each point.

Is that something one can do with Inkscape as well ?

They have been building it, AFAICT looks like it's in the dev builds.

http://wiki.inkscape.org/wiki/index.php/Mesh_Gradients

Nope, wonder how much it would cost to get it implemented?

You sure?

http://wiki.inkscape.org/wiki/index.php/Mesh_Gradients

http://www.shmoggo.com/inkscape-tutorials/how-to-unlock-the-...

Evidently not! Nice find.

That's a really clever solution!

You mean each point?That's really tough work.

He didn't have to color in every single pixel. The gradient mesh lets you create a loose grid of Bezier curves, with a color set at each intersection; Illustrator will interpolate between them.