You worked on a Zelda minigame? :3 Sounds fun! ^^ (but like a lot of work...)
Anyways, I hope you were serious when you said you wanted an explanation, because here goes nothing~!
*hopes you don't get bored reading this* >_<)
So, I think a lot of people tend not to realize that photoshop allows animation to an extent....it's not its area of expertise as a program so nothing too extensive, but it does give you some options. And what I like about animating in photoshop is that it allows you to integrate animation within a design~ ^^
Now for some clarification though. I had to resort to Photoshop CS2/Imageready CS2 to make this specifically because Photoshop CS5 wouldn't let me....=_=;; I will explain about that in a second, hold on~
First, to make this, you need to have the individual image frames in the animation sequence. If you have the video it's a lot easier to get them, because you can use a video-editing software like VirtualDub (that's the one I use ^^) to extract the sequence of frames from whatever 00:00:00-00:00:00 time you input. When it extracts them, it saves every frame in the sequence as a separate image and puts it all in a folder for you. Unfortunately, I did NOT have the video footage, so I had to get the frames by screenshotting as many as a I could manually~
(I did it anyway because....there was no way I was going to give up my idea just because of that obstacle~
) So it was basically me doing this for an hour: SCREENSHOT > PAUSE > SCREENSHOT > PAUSE > SCREENSHOT > PAUSE > SCREENSHOT and then REWIND < REWIND < REWIND < followed by SCREENSHOT > PAUSE > SCREENSHOT > PAUSE > SCREENSHOT and more REWIND < REWIND < REWIND, and then rinsing and repeating. It took a while but I managed to get a lot of the frames~ ^^
Now concerning photoshop...I hadn't realized this since I haven't done this kind of animated sig since a few years ago, but in the newer versions of photoshop, they actually have replaced the animation options it has into something different...and it wouldn't let me input the image frames into the animated sequence. =_=;; Ugh....I don't know what they were thinking. See, Photoshop CS2 used to come packaged with another program called ImageReady, where you could actually move the .PSD file you were working on back and forth between the two programs, and apparently they discontinued ImageReady in CS3 because they combined its capabilites into Photoshop. The thing is, the way this happened was sort of in the same way URA Zelda turned into Master Quest...it doesn't retain everything from the original. ImageReady had a very easy option where you could go File > Import > Folder as Frames, and it would save you a ton of heartache by taking each frame you have saved as an image in the folder you choose, and loading it on a separate layer AND as a separate frame in the animated sequence. So basically, it just takes the images and creates the animated sequence for you. ImageReady doesn't have all of the design customization options that Photoshop has however, so then you could easily move the file with the animation sequence already inputted into photoshop and continue working on it from there (you could move it back into ImageReady at any time if you wanted to also, as I mentioned before). You can then stick whatever design around it that you want (okay, this is already getting long so I'll skip elaborating here xD) but once you're done, you can go File > Save for Web (in Photoshop) or File > Save Optimized As (in ImageReady) and then save the file as a .GIF, and VOILA! You have your designed animation~ :3
The newer Photoshops tried to replace these options by including File > Import Video Frames to Layers. Now I understand how they might have thought that that would be an upgrade over importing images since you directly import the video file you want frames from, selecting what part of the video you want to import, and then have different options for working with the animation that you didn't before (or so I THINK, I actually haven't successfully tried out this "upgrade") but in all honesty I think it's actually very limiting because you're stucking being limited to inputting not only JUST video files, but only from the specific video format they allow! *shakes head* I think they should at least kept the option to input image frames if that's what you have....*grumble* *grumble* <--- intentional reference xP
Right....so in conclusion, it's possible to create animations in Photoshop, depending on....a lot of things.
To enable the Animation toolbar at the bottom that isn't normally there when you open Photoshop, you just need to go Window > Animation, and it'll open for you. I hope this wasn't a confusing block of text for you (hopefully the screenshots made it more interesting xD) and hopefully it helped! ^^