Pencil is a free application that can be used to create 2D animation. It is like an electronic pad of paper one would use to make a traditional flip book. Creative people could have a lot of fun with this and do some really cool animations. Pencil looks like a lot of fun.
I have not used it yet. If only there were lots of time to play. Please provide feedback, and samples of you animation, if you have any experience with this application. It could easily be used to make some animations for a school project.
Check out the Gallery of examples. It seems there are a number of YouTube videos of the process and the output.