Character sheets?:
Absolutely and fully necessary both as a player and a GM. It is needed to know what other characters are in the roleplay so you can figure out what would be complimentary or just redundant to play, or to see whether or not you want to play in the rp alongside that cast.
As a GM it is even more important to be able to see what someone is trying to bring into your rp, and there are many, many times when I've had to reject folks who want to bring in something that doesn't fit.

Faceclaims?:
Any but RL models. It looks creepy and just annyoing.
Everything else I enjoy.

Color codes?:
Don't care so long as it doesn't burn my eyes.

What's the 'right amout' of images?:
One. Maybe two. Per post anyway. Could have multiple different pictures for different moods. Or ages. Depends.

Freeform or GM provided code?:
I like to have a GM provided code that I can then edit if something seems to be missing.

Things that should be be included/excluded?
Included - Name, Appearance, abilities and powers, backstory, personality
Excluded - Weaknesses (a lot of people seem to require needless achilles heels on characters that don't make sense. Such as a human taking EXTRA damage from fire or something. Just have a stab in the neck still be a stab in the neck and everything will be fine)
Sexuality (A lot of folks seem to focus on this section and make it the entire character, therefor forgetting to actually make a character. I prefer to leave this section out entirely, have people make their characters, and THEN assign whatever romantic interest they want from there)

What is your character creation process?:
I tend to get inspired by a stereotype or trope and then proceed to play on it, evolving it over time to be more and more my own and unique. I start off with shameless ripoffs and parodies and then end up with something I can truly call mine, and other people usually like it too.

Is character creation just all together overrated?:
No