This is such a frustrating problem that I don't know where to begin. I am new to DGDK, but I pretty fluent in C++. I made a simple program that made a really simple click and drag interface (nothing more than dragging the picture and dropping it where you let go). Then I tried animating one of the sprites with dbCreateAnimatedSprite(), and wasn't as successful. The sprite, when I hit it with dbPlaySprite(), would do a number of things, like shred the picture into pixels, show only one pixel of the picture, or simply animate it in a spazzed out way. With some tinkering around, I found that only sprites with a picture size of 512 x 512 work. Interestingly enough, when I compiled DarkInvaders to see if I was just crazy, only the UFO showed up!
Keep in mind that these screen shots don't show the sprites flickering well.
I cannot begin to describe how important the semicolons are.
They are just too freaking important.