Abrosoft FantaMorph

FantaMorph allows you to create a transformation of one image into another and generate movies in real time. You can insert any two images, "morph" them, and then export the results as an image sequence, AVI, animated GIF file, FLASHE, or as a screensaver.

The program uses an easy-to-use skinnable interface that lets you view all effects in real time without having to save or export them first. You can also use templates and images as backgrounds for even more effect. FantaMorph includes several sample designs as standard.
It supports input images in BMP, JPEG, TIFF, PNG, GIF, TGA, PCX and 32-bit alpha formats.