What you will need: Camtasia or Camtasia Free Trial. The trial can be found here:
http://www.techsmith.com/download/camtasiatrial.asp
After you download you will want to open it up.
1. Select make new recording.
2. Select the region of the screen you want (make small, about 150x150 px or so)
3. Click through the setting until a window that has RECORD in the top left corner of it.
4. After you have recorded your shot do SAVE, then edit in Camtasia.
5. Here you can shorten the vid and when you are done shortening go to FILE>PRODUCE VIDEO AS.
6. Select custom production settings>GIF animation file, then Next, then Standard video size ( I went with 160x120, but it depends on how big it is), then click Next, on this window you can add a watermark but I neever did, Next, Next, and then make the name something like "Kruskman Rocks or something.
7. After it is done rendering go to Imageshack or Photobucket.
8. Now you are done and you can put the video in your sig. =)