First, have a look at the sprite sheets used by Flare: mods/fantasycore/images/enemies/*.png

Notice a few things:

• Always 8 rows, one per facing direction
• Starts with facing "left" and continues clockwise
• Animation frame sets are together in columns

Next, look at how the animations are defined: mods/fantasycore/animations/*.txt 

• The basic size per frame and drawing offset (from the center of the creature's feet to the top left corner of the frame)
• A short list of animations. The names in brackets are important and must match what the engine expects (not all animations are required; if you put something unexpected in the brackets it will be ignored)
• Position is the starting column (base 0).
• Frames is the number of frames for this animation (to the right of the starting column).
• Duration is how long each frame displays in milliseconds (best to use multiples of 33 really)
• Type allows some animations to loop or play back and forth.

In the enemy definition files, the art and animations are referenced: mods/fantasycore/enemies/*.txt 

• gfx_prefix= refers to the sprite sheet .png file
• animations= refers to the animation .txt file

So you'll need to create the sprite sheet and the animation file. The animation file is just a lot of manual work -- probably best to take an existing file and edit it. The sprite sheet, you'll have to create by combining the individual frames into one large image. Perhaps you can use a tool like ImageMagick's "montage" to help.

As it happens I can across this site the other day, there's a lot of good graphics there. A problem though is the licence - it doesn't have a standard one, and it's not clear how compatible this would be with Free/Open Source distribution? It allows commercial and non-commercial use, but there's the clause about how the graphics can't be redistributed elsewhere on their own. It would be fine for use when distributing a game, but might cause a problem for some Linux distribution systems, e.g., the Debian Free Software Guidelines (and the graphics couldn't be uploaded to this site)?

I don't know how people have dealt with these kinds of licences when it comes to making open source games ... I guess another option is to ask the guy if he'd be open to relicensing under say CC BY or CC BY-SA, but that would mean persuading him to allow redistribution of the graphics on other sites.

The licence CC Sampling Plus ( http://creativecommons.org/licenses/sampling+/1.0/ ) would allow basically what he is asking - but this is I believe considered non-Free for these reasons, and indeed CC have now retired it due to incompatibility problems.

Other relevant discussions:

http://forum.freegamedev.net/viewtopic.php?f=7&t=394

http://lists.debian.org/debian-legal/2007/05/msg00092.html 

Yeah those terms are not FSF's definition of Free. So I couldn't include that art in the project. A modder can create content using that art, as long as they warn end users of the license terms.

I would advise never using his assets in an open source game (or at all, honestly).  The vague self-written license could be a real issue for your project, and are decidedly FOSS incompatible.