Here is the outline or this tutorial... Right click to copy and paste in your favorite graphics program. ....  this tutorial is written in PSP version 8, but you can use PSP7 and also the new version 9 or X. Then promote background layer > select with the magic wand (mode: replace, match mode: RGB Value, Tolerance: 0) the white color and Suppr.     Duplicate this layer (rename the new layer "color")

Here's my colours. ! Please feel free to use your own choise of colors. Get to your tools . Duplicate the layer "color", (rename "effect") and save as pspimage.

Time to shade.
The Cutout Effect: select the area with your magic wand
(mode: add, match mode: RGB Value, tolerance: 0, and important contiguous is checked).

For the Drop shadow effect, select with the magic wand, go to Selections > Invert and then effects > 3D Effects >Drop shadow.
note  Ctrl+D on your keyboard to deselect

1   star (the big one) 3D effects cut out vertical 4 horizontal -2 opacity 100 blur 13 outline #ECEA48 flood fill #FDFEBC Ctrl+D	2  mouth and the eyes outline (star) adjust > gaussian blur rayon 1 Ctrl+D	3   black in the eyes (star) (#404040) add a new layer 1 pixel white adjust > gaussian blur rayon 0,5 merge down Ctrl+D	4   the star on the color layer and go on the layer "effect" add a new layer for the cheeks choose Paint brush fuzz soft size 9 step 5 density 100 opacity 10 blend mode normal color #FFC9C5 merge down and Ctrl+D
5  small star 3D effects cut out vertical 0 horizontal -1 opacity 100 blur 7 outline #ECEA48 floodfill #FDFEC6 Ctrl+D	6   paint brush 3D effects cut out vertical 0 horizontal -1 opacity 100 blur 5 outline #796351 flood fill #D2B48C Ctrl+D	7   part in grey effects cut out vertical 0 horizontal -1 opacity 100 blur 5 outline #808080 flood fill #E0E0E0 Ctrl+D	8   part in yellow 3D effects cut out vertical 0 horizontal -1 opacity 100 blur 5 outline #FFD700 flood fill #FDFEC6 Ctrl+D
9   cloud and invert the selection 3D effects drop shadow vertical 0 horizontal 1 opacity 83 blur 10,89 color #FFE4E1 Ctrl+D	10   the pink pixels into the cloud 3D effects drop shadow vertical 0 horizontal 1 opacity 51 blur 3 color #FFE4E1 adjust gaussian blur 0,7 Ctrl+D	11   girl's shoes 3D effects cut out vertical -1 horizontal -1 opacity 100 blur 4 outline #B2A590 flood fill #E6CEA8	12   add a new layer some white pixels adjust gaussian blur rayon 0,7 merge down and Ctrl+D
13   sole 3D effects cuto out vertical -1 horizontal -2 opacity 100 blur 2,5 outline #B2A590 flood fill #EAE8DA Ctrl+D	14   socks 3D effets cut out vertical -1 horizontal 0 opacity 100 blur 3 outline #B2A590 flood fill #FFFFFF Ctrl+D	15   overall plugins I.C.NET software - filters unlimited2.0 paper textures papyrus intensity 66 lightness 96 keep select this plugin is a shareware !	16   invert selection 3D effecs drop shadow vertical 0 horizontal 1 opacity 75 blur 4 color #4C5164 Ctrl+D
17   shirt 3D effects cut out vertical 1 horizontal -1 opacity 100 blur 8 outline #C1CFEA flood fill #FFFFFF	18   invert selection 3D effects drop shadow vertical 0 horizontal 1 opacity 100 blur 2 color #FFFFFF Ctrl+D	19   face and hand 3D effects cut out vertical 0 horizontal 1 opacity 100 blur 10 outline #E3B98F flood fill #FEE4C9	20   add a new layer for the cheeks choose paint brush fuzz soft de psp 8 size 9 opacity 100 density 100 step 10 blend mode normal color #FFC9C5 merge down
21   keep select add a new layer 1 whitepixel (or 2 !) adjust gaussian blur rayon 0,5 merge down Ctrl+D	22   wing on the left 3D effect cut out vertical -1 horizontal 1 opacity 60 blur 7 outline #EEA2AD flood fill #FFFFFF	23   plugin snowflakes amount 250 size begin 0 size end 20 hardness 100 transparency 0 random seed 0 color #EEA2AD	24  invert the selection 3D effect drop shado vertical 0 horizontal 1 opacity 100 blur 1 color #FFFFFF Ctrl+D
25   wing on the right 3D effect cut out vertical -1 horizontal -1 opacity 60 blur 7 outline #EEA2AD flood fill #FFFFFF	26   plugin snowflakes amount 250 size begin 0 size end 20 hardness 100 transparency 0 random seed 0 color #EEA2AD	27  invert the selection 3D effect cut out vertical 0 horizontal -1 opacity 100 blur 1 color #FFFFFF Ctrl+D	28   hair 3D effect cut out vertical -1 horizontal 1 opacity 100 blur 10 outline #796351 flood fill #BD9979 add noise 10% uniform monochrome
29   add a new layer choose paint brush calligraphy tablet pen hardness 50 step 10 density 100 thickness 100 rotation change opacity 20 blend mode normal	30  size 6 color #000000 adjust gaussian blur rayon=1	31  on the same layer size 10 color #FFFFC0 adjust gaussian blur rayon=1	32  that's the result merge down and Ctrl+D
33  ribbon texture effects vertical blind width 3 opacity 100 light from left/top color #F5F58D	34  invert the selection 3D effect drop shadow vertical 0 horizontal -1 opacity 100 blur 3 color #F5F58D	35  an other time 3D effect drop shadow vertical 0 horizontal -1 opacity 100 blur 1 color #FFFFFF Ctrl+D	36  the second ribbon 3D effect cut out vertical -1 horizontal 2 opacity 100 blur 5 outline #FFD700 flood fill #FEEE93 add some white pixels
37  inverser la sélection effet 3D ombre portée vertical 0 horizontal -1 opacité 100 flou 1 couleur #FFFFFF Ctrl+D	it' over! may be too long However, I whish you find it cute