I used Paint shop pro 8 w/ this tutorial but PSP8 is similiar to older versions as well
1) Open up your Paint Shop Pro program
2) Pick an image you would like to use this effect on, i chose the image above.
1) Go to LAYERS, then DUPLICATE.
1) You now have 2 layers.
2) Go to EFFECTS, then DISTORTION EFFECTS, then PIXELATE.
3) It’s better if your pixelated block size is symmetric, the size i chose was 25.
4) After you’re done, your image should look pixelated and funky lookin’.
1) Now, go to LAYERS, then PROPERTIES.
1) In the drop-down menu to the right of “BLEND MODE: “, you can choose what kind of effect your pixelation will show up as, i chose OVERLAY.
and this is what i got! 
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