It's no secret that adventure games made by Sierra On-Line and LucasArts were a big part of my childhood and early teenage years. I enjoyed what both companies had to offer, but I always categorized them in my mind as Sierra = realistic and LucasArts = cartoony. When I started making my own adventure games, I was more drawn towards emulating the Sierra style, in part because I was going for an art style based more in reality, and also because the default interface in AGS was the Sierra GUI.
I was also always more interested in Sierra's production techniques for their VGA games, namely the fact that most of the backgrounds were done as oil paintings which were later scanned in, and the character animations were largely rotoscoped. Sierra was not the only game company to do this, of course. The classic Out of this World/Another World and Prince of Persia are great examples of early rotoscoping animation. However, rotoscoping was something that set Sierra apart from LucasArts, as the latter never used it in any of their games.
For those unfamiliar, rotoscoping is a technique in which a subject is filmed performing an action, and then those frames of film are traced over to create the animation. It's best seen in Ralph Bakshi's Lord of the Rings or the work of rotoscoping pioneer with an incredibly oddly spelled first name, Eadweard Muybridge. It's a fair bit of work, but for people like me who aren't very good at animating by hand, it can be a real asset.
Obviously, the oil painting backgrounds is out of the question, as I have neither the time nor the money to spend on that many canvases, paints, and a scanner. Besides, the "painterly look" can easily be emulated in Photoshop. However, rotoscoping is far easier, and in my opinion, gives great results. Is it cheating? Maybe, but I'd rather cheat than have a crappy looking animation.
So how is it done? The simplest way is to film yourself or someone you know performing the action. Nowadays, this can easily be done with a digital camera, or even most smartphones. Just make sure you have a tripod or someplace to set your recording device. Once you've got your filmed action, you can use a video editing program like Premiere or Windows Movie Maker to export individual frames, which you can then load into your paint program, resize to the size of your sprites, and then paint over. The only downside is that you often end up with very long animations, especially if you want them looking smooth.
I'll probably do a more in-depth/hands on tutorial in the future, as it seems to be something quite a few people are interested in.