In Photoshop CS, use the animation palette in conjunction with the layers and web content (rollovers in 7.0) palettes.
• Each "cell" or frame of your animation should be on a separate layer.
• OPEN the animation palette under submenu: WINDOW. You should see one frame of your animation.
• Click the triangle (drop-down menu) in the upper right corner to add or delete frames.
• Once the new frame is added, adjust your layers by turning the visibility on or off.
• Press the play button at the bottom of the animation palette to test.
To add a frame in the middle of the animation, click the frame in the animation palette that will proceed the new frame and then click triangle (upper right) - NEW FRAME.
To change position of a frame, click and drag it to a new position in the animation palette.
To TWEEN (from the word between - adds smoothness to transitions):
• Choose a specific layer.
• Choose a specific frame by clicking on it.
• Click the TWEEN button at the bottom of the animation palette (looks like 4 floating circles - 2 left of trash can).
SAVE OPTIMIZED AS: yourFILE.gif and now you are ready to load into your HTML doc like any other image.