The compositing system used for something like this is typically a
flame or inferno (autodesk/discreet) seat which can then motion blend
between the still sequences. There are also some cheaper plugins for
AfterEffects and Shake that will do this, albeit not nearly as good,
which is why this doesn't look perfect in some regards. RE-Flex Morph
which comes with Autodesk Combustion 4 will also do this (with a
decent amount of hand massaging).
You can also do this easily with Fusion 5, anyway it's not that
difficuilt anyways.
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