Paint.NET is allowed! Ideally you are supposed to use just MS Paint, but since MS Paint doesn't support many things needed for game development, such as transparency, you are allowed to use other programs alongside to create artwork. Art should have a paint-like aesthetic however. Hope this helps! :)
I don't thing paint.net should be allowed. Since it has more "complex" features such as layers. Unless it is used to give transparency to ms paint images.
