Depending on the video format determines the steps.
For example, with Adobe Imageready I can open an .avi.
I can also determine what part of the clip I want in and how many frames per second.
There are other cases where you would use Adobe Premiere to open the video file and you would just export that video (to the part you want) out into a .gif format. I would use Imageready after that to really fine tune the animated gif in terms of file size (if that was an issue)
It's all very easy
I put up a downloadable of Photoshop 8 on this site a few days ago, which included Imageready so I hope you got it.
Maybe one day I'll put up both PS & Premiere on here so that people can make all sorts of avatars...