Tops of legs and arms are rounded and sometimes the black lines are removed for a better look. The idea is to make a computer puppet similar to the way it might be made by cutting out drawings on paper and overlapping the joints and putting brads through them.
Once the characters are colored and the backgrounds, props and foregrounds are done it is time for the fun of animating. Characters should each have a photoshop file of their own with the layers labeled and placed on separate layers. Discard layers you don't need to avoid confusion. I would usually put the background and foregrounds that went with it into the same file on different layers (these would be cut out and colored the same as the characters.)
The photoshop files are opened in After Effects 6.5 on a Mac G5. Depending upon the type of animation the head may be a separate file from the body. If the animations require lip synching or complex expressions than it would be in a separate file with a head, right and left eye balls, eyebrows, eyelids, and a mouth. Often the mouth was created in After Effects using the mask tool to make a mouth shaped mask on a red solid that could be animated. Eyebrows were sometimes done the same way.