There are two ways you can achieve resized avatars while keeping the animation.
1) You can specify the URL as Frank pointed out. Once you find an avatar you like, save it and upload it to your server (keep it in an easy-to-reach folder such as
www.yoursite.com/myavatars/). In your profile, for the avatar selection, choose Specify avatar by URL and then type the URL to the newly uploaded image (such as
http://www.yoursite.com/myavatars/sheep.gif).
2) The other way (and my preferred method) is to save the gif to your computer, then use any graphics program, resize it to match the allowed avatar size on your site, and upload it to your folder. This method requires a bit more work and some basic knowledge of image manipulation, but gives better control over the end product.
In either case, I will be glad to assist you further if needed.