Key-frame animation systems (the former method) seem to be slowly dying out in games. But if you want something that's quick-and-dirty, I'd suggest implementing that as I was able to incorporate Quake2's .md2 format in my engine in under a day.

I do not have any direct experience with implementing a skeletal animation system so I do not know how difficult it is to implement.

I have a small document which briefly describes the .md2 format. Email me at kradue@yahoo.com if you'd like me to send you a copy.

Alright, I'm finally getting tired of rendering stuff like planes, cars and tanks...I'd like to do things that have some animation (like people). Only thing is that I can only think of two different ways to represent the object: One model for each frame of animation (Eerily remniscient of my 2D isometric times), or do some sort of skeltal modeling system. I would rather not use the former method, because it stinks, or the latter, because I don't think I want to spend that much time on this. Anyone have some suggestions for me?

Skeletal animation varies in difficulty depending on how you implement it. If you just divide your model up into chunks, each assigned to its own bone, it becomes a very simplistic manner. If you want to do real skeletal deformation, it becomes a bit trickier. Add an inverse kinematics system on top of that and you're talking some real work.