For a start, you need an animation that isn't too big, file-wise.(I had this really excellent Marauder's Map avatar that wouldn't upload, so you might be trying something too big as well) Then you need to make sure it's an png, jpg or gif file, such as
http://i182.photobucket.com/albums/x66/ ... Potter.gif
And then you upload it the way you would a single-frame avatar. Most looping avatars are simply three or four frames put in sequence, after all.
