There doesn't seem to be a really good way to make the latest easiest to find unless I keep editing the first post or create a new thread... Anyway.
Here's the latest demo. Still the same three levels but a bunch of collision detection bugs have been fixed between enemies, items, and the player. Controls feel good to me as well.
I started working on a new level with some new assets. If you load up "TEST0.LVL" instead of "LEVEL0.LVL" as the start level, you can play it. I haven't added the menu option yet to select a user level like I had in Santa's Christmas Rescue.
Download Link
Edit:
Messed a bit with having a transparency color in the sprite so that I could have different colored backgrounds. It's not in the posted demo as I was just messing around quick with the code but looks like it works. I'm probably not going to use it in the game though as it takes place at night so it's really not needed. Perhaps it would be good though to keep the sprites from writing over each other like when the player and enemy get too close... hmm..
Here's a quick video demo: