I think so, I've tried it on my 7210 and most of the other similar series 40 phones (6100, 6610 and 7250), which can play the animated GIFs in the gallery but can't do them as wallpaper.

It's a real shame but that's the way it is. I guess it's to do with the battery life as obviously it's quite taxing on the phone's CPU, just as animated images on the 7650 can kill the battery in under a day - that's probably why Nokia didn't implement it - you'd get people putting animated images on the backdrop then wondering why the battery went flat so fast!

I have that phone... ive downloaded a few matrix wallpapers that move if you open them. but if i set it as wallpaper it doesnt move?!

Is it meant to be like that?