That animation is nicely done! Is it at 100% zoom? The lines look very sharp and scratchy - were you drawing with a single pixel diameter? Are you able to soften or anti-alias the brushes in Pencil?
I think that link shows it miniaturized. If you press "ctrl" on your keyboard and move the scrollwheel of your mouse to make it bigger, you'll see it in its original resolution. It was mostly drawn in about 1/2 the screen estate of the Pandora, although I sometimes zoomed in a bit for some details (i.e. the eyes), or zoomed out for larger details. I like drawing with lots of small, sketchy lines, so I used the brush in Pencil at something like 0.9 with 1.0 feather (although it varied).
The brushes in Pencil will look smoother if you draw while zoomed out a bit and don't use such a small diameter, of course. Zooming out also makes it slower, though; just like MyPaint, Pencil tends to be a bit slow, so if you make strokes quickly sometimes they'll look jagged.
Of course the brushes can be soft, see the colouring? That's also done with the same brush, just at a much larger diameter. Also, it doesn't look nearly as jagged when converted from .swf to .avi with SWF2Video (unfortunately, only the Mac version of Pencil can export directly as a video file, and I don't own a Mac).
Although MyPaint might be a bit faster in Minimenu; I'll have to try that. (Pencil doesn't work in Minimenu because you have to use the L-shoulder-button aka. Shift to drag the screen around since it's taller than the Pandora's resolution - despite that, it's pretty comfy to use, at least if you're right-handed - but Minimenu doesn't allow that)
If you are lightly tapping the screen, then I *suppose* you would be fine without one.
Applying pressure and dragging the stylus across the screen regularly is going to show wear sooner or later.
I used a screen protector on my pimped HTC P4350 and after years of heavy use the wear is very visible. I would much rather wear out a replaceable piece of plastic than the screen itself.
I want my Pandora to last. 
Hmm, maybe I'll look into one. I've never used one of those things before. Do they hurt accuracy or visibility?