Short demo showing how to do animations with nothing but palette cycling.
On the right is the actual sprite used, with not palette cycling.
On the left is the resulting animation, when cycling through the palette.
A very primitive example of the amazing techniques seen here: http://www.effectgames.com/demos/canvascycle/?sound=0
Disclaimer: I'm not an artist, so it would be great to see an actual pixel artist do something with this. :)