2. You ain't bad. Heck, you are doing all this with paint.net, right? Xing is using Photoshop I guess. That's a huge difference.
For instance, imagine you both in an ice carving competition. You use a stone as big as your head (well, a sharpened stone, MS Paint is the stone...). Xing uses a plethora of tools, he has everything he needs.
Now, of course, the outcome is obvious - but, considering you're still using that stone, your sculpture does look really, really good.
Besides, as an artist it is important to be proud of your own work. After a year or so you can go ahead and say "Back then, all I made was crap!".:)