>I'm not positive, I don't know how to open MSPaint up to automation, maybe someone else here does?

I doubt MSPaint is an automation server, but I think you can do with Visio Automation. That wouldu be cool.

Creating the pictures doesn't seem the difficult part, you can even create those with markup languages:
http://fox.wikis.com/wc.dll?Wiki~VmL~softwareEng

But how are ou gonna save it as a GIF, thats what seems to me as trickiest.