If you want to save things in a GIF format, do File --> Save For Web then choose one of the GIF settings. That is the best way if you ware planning on putting it online because it will remove all extraneous information that is not necessary to allow the picture to display.

If you want to work in a GIF format while within Photoshop, you need to change the color mode (Image --> Mode) to Indexed Color. Remember GIFs can only have 256 colors.

use the animation feature in photoshop by dragging the layers onto the animation bar. Choose the transition speed and save it using "Save For Web" under Files tab.

if you come across macromedia fireworks it is more easy
what you need to consider is whether you want to create:
1.animated gif(a picture with animation)
2. normal gif

for normal gif you have to open /create the picture then yo go to FIle-save as-(select gif) -save

for animated gif
you are supporsed to have more than one picture(eg 3 pictures)
then open all pictures with fireworks
then select the first picture then go to frame, then select duplicate the frame
and u will be given the option to add number of frames you need
example 3 then click ok
then the picture will have 3 frames
then u just copy and paste the other immages in those newer frames by selecting the frame then you add the picture
then you have to set time for each frame(it is allocated beside frame number)
then you have to follow the steps
file-save as - animated gif -ok

for more clarifications you can contact me via <EMAIL SNIPPED>

g.day!!

photoshop difficult program, maybe u try more gently soft? I use Video Avatar tool for creating GIF from any video file.

I've tried messing around with photoshop, although, i find fireworks does what I need it too, and is much easier to use. Its like 400 I think for CS4.

Do you mean an animated GIF?

Yes sir,
Gif and also animated gif. What size to be initialized before starting up. That is image size, canvas size etc?

This is the size of the finished image you want. If you want a 2" by 2" image, then initialize it for that size.