The trick is to make sure that each character is the same height
And the baseline of each character is the same number of pixels from the bottom of the GIF file
--this can be tricky if you're doing this with lowercase--it's easier with all caps because they have no descenders. You also have to be careful because like old hot-lead, these characters can't be kerned, another reason why all caps will seem to have more even spacing than if you try it with lowercase.
The downside--in reality, it can take longer to display on your visitors computer because it can take longer to make many individual calls to a server than to just download
a file that make be a K or two larger.
They can also be tedious to code. That said, my site still uses them, because I like that I can have 26 letters instead of hundreds of individual title graphics--and it adds a little animation and novelty.