The artwork was drawn in Photoshop 4 with an Intuos 3 6x8 drawing tablet. It was animated in Ulead GIF Animator 5, and exported as a SWF file in ImageReady CS2.
The weird drawing method I use has been described before, but here's a quick tutorial for anyone who happens to be curious. Screenshots are from PS4.
1) You could use any two colors you like. I usually stick with the default black/white foreground/background colors. Photoshop (at least up through CS2; not sure about newer-fangled versions) has a handy button you can click on the toolbar to reset them, or you can just use the "D" keyboard shortcut.
2) Select the Lasso tool, and make sure it's set to Feather = 0, and Anti-aliased is checked.
3) In the Layers window, sure you have the Background selected, and not on a regular Layer.
If you've already converted your Background to a Layer, you'll have to do "Flatten Image" to get a real Background again ("Layer > Flatten Image," or use the "Flatten Image" command from the ">" button at the upper right of the Layers window; this is a destructive change, so you may be better off just making a new image).
4) Draw the shape you want on your canvas with the Lasso tool. When you release the button, you'll have a "crawling ants" selection in the shape you drew.
You haven't actually made a change yet, so if you don't like the shape, you can always just clear the selection (CTRL+D, or just click somewhere else on the canvas) and make another.
5) Make sure the color you want your shape to become is set as the current Background Color.
If you're just using black and white, you can toggle between the two by pressing "X," or by clicking the little curved double-arrow icon on the toolbar. The box below it shows your current Background Color.
6) Cut the shape you've made out of the Background by using the "Cut" command. The keyboard shortcut is CTRL+X, or you can use the menu command.
And you're done: your lasso selection cuts away the Background to the Background Color in the shape you drew.
If you ever want to clear the whole mess and start over, just CTRL+A to select everything, and CTRL+X to cut it all back to the Background Color.
If you make a cut you don't like, just Undo (CTRL+Z) to get back to where you were before.
If you like a shape you've got traced with the Lasso, but want to modify it a bit, hold SHIFT while drawing to add to the shape, or ALT while drawing to subtract from it.
Most of the drawings I do this way are made with many lasso selection cuts in both black and white. The drawing tablet pen I use has two thumb buttons, and I've set them up so that in Photoshop they're bound to Cut (CTRL+X) and Foreground/Background Color toggle (X). That lets me draw a shape, click the thumb switch to cut it out, and toggle back and forth between cutting to black and cutting to white very quickly--pretty handy.
For drawings that are going to be rendered out, I usually draw them double-sized, viewing the canvas at 50% magnification (CTRL+- twice). If you zoom in on them (CTRL++) they'll look a little wobbly, but when you shrink the image down by 50% along each dimension after you're done drawing ("Image > Image Size..."), it results in a smoother image than you'd have been able to get otherwise. Also, you can zoom in to 100% pixel size if you need to do precise work on a small detail.
