I also got the same problem. After doing some research I found out the root cause of the problem (atleast for my case). But I don't have any solution on how to get rid of this issue. May be Microsoft can address this.
The issue is when "IE 7.0 is sending request" or "when there is some serious stuff being done on the server side" IE 7 is not able to play animation in the gif image. It is showing the image but it is not playing any animation stuff. For example in my "jsp"(JavaServer Pages) I have an animated gif image that contains progress bar kind of thing that moves from right to left (repeats) continously when user selects an file (path) and clicks upload button. The animated gif works fine in IE 6.0 and FF 1.5 but not in IE 7.0. The progress bar stands still at a position in IE 7.0 when the form is getting "submitted" (or when "sending request").
But when I open the same image in IE 7.0 directly by giving the file path in the address bar it is working perfect with all animation. So I think there is some defect with IE 7.0 with animated gif images not being played when the form is getting submitted or request is being sent.
If anyone has an work around for this issue please post here.