Photoshop :: High Quality .Gif Animations?

expierence with PS, but am having a hard time making an animation sig. file, that is high quality. First is it simpy impossible? Below is an example of what it looks like in .gif form. It looks amazing under the original tab, but when I save it or go to the optomize tab its looks retarded. I'm adding a high-rez cut out of a character from a game I play. The only animation I want the high-rez cut out to do is fade out. When I add the cut-out to the animation, it screws all the other images as well, includeing simple lightnigh bolts drawn in. I'll post two examples, one with out the character in, and one with it in. Pay attention to how even things that were fine before, get messed up. Do I need to make my cut-outs a .gif file before even putting them in, does that matter? I'm using Adobe ImageReady 7.0. My optomized settings are: Gif, Selective, 256Colors, No Dither, everything else off or 0. Do I have to save it optomized, file size isnt a big deal.

Files:

(Added .2 delay so its easier to see , lightningbad.gif is with the cut out/bad quality, lightninggood.gif is without cut out/good quality)