it's fine to use screenshots just make sure the sig is only 225 pixels Long and 155 pixels High.
I've made some in-game Gifs before...
like this one
It's my level 200 character in Phantasy Star Online [img]tongue.gif[/img] the game that my Sig was inspired by. See i drew it as a "fan art" and as long as i don't make money off of it it's ok...