Some versions of IE have trouble with .gif files. The best practice that I'm aware of is using .ico files. However, I believe they may become depreciated as .png and .gif files are more accessible.
Some browsers, such as Firefox/Opera, support animated .gif's.
Your best bet would be to try it. You can upload .jpg, .png, .gif files into the /icons/ folder and it'll automatically fetch to the script for selecting.
Post results if you do.
Thanks!
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