The Pencil Tool
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When you have work with some delicate detail, use the pencil. It has some special zooming features and convenient eraser functionality.

Detailed Drawing

Select the pencil tool. I'm going to demonstrate drawing a happy face on this icon.
Step 1
Pressing the option key enables the zoom features of the pencil tool. With the option key held down, the pencil tool turns into the 8x Zoom tool. Option-click in the document to zoom in.
Step 2
Now we're zoomed in at 800%. This makes it easy to draw the happy face.
Step 3
We're done drawing (or maybe we're not done but wondering what it looks like at 100% zoom). Just option-click again. Since we are currently zoomed in at 800%, the pencil lets you instantly zoom to 100%.
And now we're back to 100%. Instant zoom is cool.

Eraser Functionality
If you are drawing with the pencil tool and make a small mistake, it's easy to fix. If you have the pencil set to use a certain colour, if you draw over a pixel that already has that colour (if you are drawing with black and you start drawing on something that is already black), the pencil will start behaving as an eraser instead.

Well the smile came out a bit crooked. I need to fix that.
As you can see, I was drawing with black. If I draw again over the black area, it erases instead.
All done.
And now it's smiling. Note that I never had to change the colour or use the eraser.

One thing to keep in mind is that the pencil always erases with white. If you need to colour something out, just use a hot key to select the dropper tool and pick the colour you need (by default, the hot key for the dropper tool is D. Just hold it down while you need it).