dss311 wrote:
The only thing I am not sure is if it will do the animated gifs (possibly with active desktop windows xp?)
Easy enough for you to find out, grab an animated gif and see if you can set Windows to use it as your wallpaper.
WW doesn't add anything to Windows capabilities, it simply uses what's available to the max.

BTW A webpage can be created to display one or more animated images, animated gifs and swfs, and to refresh automatically and when displayed in a browser opened full screen would accomplish pretty much the same as what you're asking.