Looked a bit and couldn't find a texture on this. I've no idea if this works but is it possible to make a skin on something that is animated. I know with files such as .gif you can make multiple layers flip through but is there a way with a tga?

No. You could make some "fake terrain model" with a scrolled texture or something but thats all AFAIK.

Correct -- If you want to use a model that animates that's possible, but not the terrain.