The game is indeed amazingly improved thanks to Thardus!
I've uploaded the most recent version. Not all graphics are done yet. In level 6, the new floor and wall graphics appear! The slime monster is new, all other monsters still use the old graphics.
I've also created a webpage for the game now:
http://lodev.org/wizardtower/So what's new?
-New graphics by Thardus!
-Animating player character, smoother scrolling screen and monsters, more other animating things.
-More floor and wall themes than before.
-An Options screen with various tweaks!
-You can't accidently step on things that make you die anymore, except if you enable the Hardcore Mode!
-Some levels have been edited a bit, usually to make them easier.
-The stats have a total score value now (it used to be just times and move amounts)
What's still to come?
-A Chip's Challenge custom level author has given permission to port some of his levels to this game!
-More new graphics.
-Support for complete custom level sets instead of just a single custom level
-...
I thought you did a good job with the puzzles. Rather than making the player read a ton of dialogue explaining how everything worked, you used the "show-don't-tell" method to teach players what to do with their environment, which I think is great. The puzzles weren't too difficult, but were still interesting. I also enjoyed the little messages.
Thanks! The game has come a long way, in the beginning it started with a set of 10 "Tutorial" levels and people had suggested to do the "show-don't-tell" approach instead, so thanks!

The game was slightly laggy, which made certain sections challenging in a bad way. In "Forest Ice" for example, it was pretty frustrating getting through the area with the mice due to the lag. I don't mind difficult levels, but when the difficulty comes from lag it is annoying.
That's a shame, I try to make it as responsive as possible. Maybe try messing with the new "Scrolling Screen" and "Scrolling Monster" settings in the options window?
Also, your move speed is limited and locked to tiles (on purpose, it's that type of puzzle game), if you tap the keys faster than your character can move, this might be perceived as lag but it's just the character finishing the previous move.
I wasn't sure how the sword and shield worked. When you have the shield, can you just walk into enemies? When you have the sword, do you kill enemies an unlimited number of times from just walking into them?
Indeed. This game uses the arrow keys only, the sword requires no key to swing it or anything. If you have either the sword, or the shield, you don't die from monsters anymore but "interact" with them in a different way:
-shield: monsters won't walk onto you anymore (you're a wall to them), and you can't walk onto monsters either. This means monsters will block you and can cause you to get stuck!
-sword: monsters will still walk onto you, and you can pass through monsters. In both cases, the monster will immediately die (instead of you).
-both shield and sword: monsters won't walk onto you, but, you can walk onto monsters and kill them, so they can't block your way.
I should add more shield and sword levels, there are so many potential puzzles with it, you can control the movements of monsters with the shield and no current level uses that feature yet!
The coin SFX is rather grating when heard multiple times in a row; you might consider doing something less high pitched (lightly tossing a few coins in your hand for example), or pitch shifting the coin SFX.
Good suggestion, I agree! I created the sound the way you described with a mic. I'm not a professional so let me know if it's a bad sound