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I use Fraps to capture video sequences from the game.
I then open the video sequence captured from the game (an AVI movie file) with Jasc Animation Shop (comes with Paint Shop Pro). With Jasc Animation shop I am able to remove half the frames (makes smaller filesizes, plus animated graphics do not display frames as fast as AVI/video). I then would crop the area of the video that I want to keep. Then I use Animations shops features to crop the video clip how I want it, and save it as a GIF file. Jasc Animation shop being designed to develop GIF files, has an optimizer that will help make the file as small as it possibly can be and still display your animation. One can also of course copy/paste/import thier own frames into the application to make a completely custom form of animation, like the ones that vary display of letters/pictures.
The avatar for the dueces of the pirate lass throwing dirt was made this way, although I had to actually copy/paste 2 animations together to get the gal, and the dueces cards zooming up.
To have the animation continually repeat, there is a "Repeat" or "Loop" feature in gif files to instruct them to display over and over.
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