HAIRDYES  Starless72's suggestion works.

However, the software recognizes ONLY .PICT files (and .gif, which is what we are trying to create, so that is no help), which destroy image quality.

Sigh. We do get what we pay for, most often...  
(Version 1.0)

HAIRDYES  Yes dear, free is great. Brava. I personally don't think it's too much of a "gripe" to request that the application perform at a basic level, which is what these people seem to be "griping" about. They are troubleshooting for solutions, so please be quiet and enjoy your smooth-running program while we try to find a solution to our problems using it, which have nothing to do with ingratitude.  
(Version 1.0)

HAIRDYES  I am also having this problem with this free software. "Add Frame" recognizes NO images files.  
(Version 1.0)