While iPhone is capable of doing a lot more stuff than it already does, Apple for some reason has decided to keep it limited from doing all of that. Flash on iPhone for example, it wouldn’t have had been a problem for Apple to add that to the iPhone. Animated wallpapers is just another functionality from that lot which can however be enabled on a jailbroken iPhone running iOS 4.x using an app called vWallaper.
Below is the step-by-step guide on how to do that
Step 1: Navigate to Cydia and tap Manage
Step 2: Tap sources and edit source to add http://i.danstaface.net/deb
Step 3: Wait for Cydia to update the source. Search Cydia for “vWallpaper” and install it.
This wouldn’t slow down your iPhone which can be seen below in a video by RedmondPie