AVI could do the quality, however the transparency could be a problem. 1280x720 is a LOT of real estate to cover, if the entire area isn't being animated at the same time, you might be better off only redrawing the parts of the screen that change. Or moving a picture around the screen as the animation. Aside from that, your next step would probably be using managed DirectX to pile all those graphics into buffers.
The true man wants two things: danger and play. For that reason he wants woman, as the most dangerous plaything.