First, do not use animated png's as they are not supported cross browser and even those that do support it require a plug-in, plus the file size is normally excessive compared with flash, (maybe in 5-10years time).
If you feel confident with jQuery then use this as this would not require flash, but for simplicity my preference would be flash or if you can keep the file size small an animated gif, but beware constant running animations do tend to become annoying to users very quickly, and at least with flash you can set the animation time and offer a 're-play' button.
I'm looking to only have a brief 2 second clip play on mouse-over so nothing repititive. I think flash might be the way to go.
Does anyone have any documentation for this jquery animation though? The example i posted seems like too big of a project for something Im looking for. Just for future consideration!
The tutorial for the jQuery plug-in is under the documentation at - http://spritely.net/documentation/.
The code for the jQuery plug-in is much smaller than a simple flash animation plus swfobject.js code would be, but using it would depend on your confidence level with jQuery.