wont accept filetype. Is it possible to convert or use a format which is both jsp friendly and still animated?

You could ask around in the Gfx section if anyone there can change it's format.

What is the error you're receiving and what image link are you using?

Make sure when you insert the direct link in the 'Change Avatar' section that you remove the space at the end - sometimes when you copy/paste a link into that spot, it adds/has a space at the end, and it will notify you that the file extension isn't allowed.

Also try saving the image(should be a .gif file) then upload it with www.tinypic.com, copy and paste the bottom option "direct layouts" the same will work for posting in threads but choose the link to copy that has [img] file[img/]