The file does not appear to be an image. Bug?
That error will occur if the fileinfo extension or imagick (ImageMagick) extension are not configured with a comprehensive list of file MIME types (the "magic file", as they refer to it, I think), or the images you're uploading aren't really images despite their extensions.

Regarding GIFs - you must use ImageMagick if you want to upload animated GIFs, as it's not possible for Craft to reconstruct an animated gif using the GD library.