PowerPoint animation allows users to create animated presentations and movies by animating objects between slides. There are four main types of animations: entrance, exit, emphasis, and motion paths. To add animations, users select the object to animate and choose the animation type and duration. Effective use of animation involves keeping it simple, limiting animations per slide, timing animations with content, and practicing timings. Hyperlinks in PowerPoint function similarly to web links and allow jumping between slides, files, or webpages.