1- How do I add a PayPal donation button to my HTML?
2- I can't figure out how to add smilies to the ones I have because all I can do is replace one that is there?

1) Its html, place it where you want in the templates
2) Smilie manager in AdminCP. You must first upload them to your servers ftp though.

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How do I just plase the HTML in the templates?
I want to put it in a post.

Where in the FTP do I load the smilies

3rd question-- why are some animated avatars working and others don't

1) what ever template you want, where ever you want it to be placed like i said.
2)any location, as you must list it.
3) all depends on the img and if its supported.

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the path to the smilies folder is usually
forum/images/smilies/

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My avatar is the only one that seems to be animated and all the other ones are frozen.