Here is a a video I have been working on since December for a Jingle Punks' music video for a kids DVD.
you may have to copy and paste this link (super low-res, but you'll get the gist...):
I did all the illustrations by hand (colored pencils) then scanned them into Photoshop and cut them up and put them in Flash, where i did all the animation. Really put Flash to the limits. Higher resolution screen grabs below...