Thanks for all the great comments!
Sven: The red circle at the top is his eye. I really disliked the look of it having a pupil, which is why it's blank red.
Here's a new version: http://dl.dropbox.com/u/6479087/Entity_Player_Head%20%282%29.png
I added a gradient to the collar, as well as a glow to the chest-piece and eye, alongside a much fainter glow to the white reflections on the head and arm.