All I did with mine on my forum was simply upload it - and it displays as animated in the forums just fine. I don't think I did anything special on the system to enable it. Tried to test it here but got a warning that my avatar was to large - to limit it to 40kb.
dang... ninja'd again. That's what happens when I go to compose a message, switch to another window to make sure of something then come back and check the alerts.
This is the only thing I did to XF once I had enabled imagemgick - located under the attachments setting in ACP
Thanks Mike. I knew it was something simple but we couldn't remember.
Also just a reminder to everyone, Jake did say in another thread that once imagick PHP is activated, previously uploaded member animated avatars won't work as it is not retroactive. So member will have to re-install the animated avatar once imagick is installed.