gifs are okay. transparent gifs should be okay too, though I have not tried it.
you may need to use an outputimage=gif parameter, at least for 10g
i have done this for paper layouts, but i've never tried otherwise.
I already tried to use transparent gif in 2 ways:
-like u said: insert->image->browse
-and exporting it from the database in a query.
But in both ways it failed to load properly, the transparent gif image didn't show correctly in paper layout and when running it. It is like reports doesn't manage transparent gifs well, i tried with different transparent gifs images also...