there are of course many different ways to approach this.
I will post the number of extra art in brackets at the end of each option in the case of 4 different tile types.
- hand craft edges between different tiles for every possible combination and direction(24)
- create a natural order for tile types (rock > grass > water) and hand craft edges for every tile typ and direction.
Then when to tiles of a diferent type meet, choos the edge tile from the type which is higher in the hirachie(16)
- use blending with an alpha map which is modulated linearly(4)
- just blend linearly between two tiles on their edge(0)
In your case were you have little tiles with pixel art, I would choose option two. The extra work only scales linearly and pixelart with blending doesn't look that good.