Go
here.
Download and install the application. Open the application.
Go to file ---> Open.
Open your .png
Go to file ---> save as...
When you are saving it, click the drop down box and save it as a .gif
Try the new GFX in your level/npc. If you did it right, it should work, also, it shouldn't distort the image.
(There is a way of making it so that your .png image will work, but I decided to keep it simple.)