Cutscenes can be a lot of work and become by far the largest chunk of your Campaign pack. It depends very much on what programs you have available and on how large you want the campaign to be what you do. Try to judge for yourself if you would feel the time taken to download the cutscene is worth it for what it adds to the experience. This is a very general overview, more details in each section.
The first thing you need is Smacker. This is a freely available program which creates (surprise) Smacker format animations. It can convert stills and avis to smacker format and vice-versa (so if you like you can examine the standard cutscenes more closely). What is very useful is that it can mix in a soundtrack which makes the cutscene much more involving, but can be complex to do with other programs.
Then you need something to Smack. You should choose the files you want to smack and then create a list (I generally simply let the program tell me that I have selected multiple files and take me through the process). Once that is done you should examine the options. You should change the frame rate to the appropriate value and maybe also adjust the compression ratio. Smacker has a very helpful help file which explains the options very well.
Once the program has finished smacking the pictures you would be advised to look at the resulting smk animation and see if there are any problems. Assuming that there aren't then it is time to add the sound which is done with the mixer tab. You should select the smk animation in the one window and the wave file you want to use in the other. Try to keep some sound going the whole time, even if it is just quiet background music. You may find that you cannot get a snatch of music that is both the right length and sounds right (as it is between two fade points), in which case you may have to alter the length of your cutscene by a second or two either way or try to find a part where you can edit out a piece without spoiling the rhythm.
At some point you will also need to make a small 256 colour bitmap to serve as a thumbnail on the cutscene screen. Totally Games have 100*56 thumbnails since they have "widescreen" animations (640*360), however if your cutsceens have a different aspect ratio (like 320*240 or 640*480 both of which work) and you don't want to distort the little picture BoP seems happy to display 100*75 thumbnails.
Once that is done your cutscene is complete and ready to be added.
This is the largest file size and can be the most challenging and effective. To get smooth motion you will need to generate a large number of frames either with a 3D animation package (and probably the meshes from the SWMA), by drawing by hand (not really practical unless you own Disney), or by using the layers option (if present) in your art package to have simple motions (which was/is good enough for many old cartoons). All of these methods require a lot of work, though the second would require by far the most.
Whichever method you choose to use it is fairly vital that you plan things out carefully if it is going to be reasonably complex as it is helpful to have notes and a storyboard to refer to as you go through the long process of transferring what you imagined into a form that other people can see it in.
One thing to bear in mind though is that if you plan on conveying fairly complex plot elements in your cutscene then you may find it difficult to avoid character animation, which can be far more difficult than simply zooming ships around. In this you may be advised to follow Totally Games's example and concentrate on ship based cutscenes (which was unfortunately a bit of a backwards step after their excellent work on TIE Fighters cutscenes, which ,although animated more simply, did have people taking rather than just ships.)
Tutorials on making animations abound on the net so I would refer you to them.
This can be by far the smallest file size, and can produce some wonderful results. It is not always less work than moving pictures as a simple motion can be easier to set up than a complex still picture. This option is the one with the most possible methods of creation.
The first method I will mention can take even longer than
moving pictures, and be solid work rather than waiting for the
computer to finish chugging away. Draw them yourself (think
comic). For this you will only require a good art package (or a
good scanner and some paper) and a load of talent. If you are
good then this will be very effective and distinctive, it will
stand out from the computer generated norm. If you are not so
good then it will still stand out, but for the wrong reasons.
Alternatively if you want the same sort of hand-drawn effect then an art package with layers will allow you to import a picture (created with one of the following methods or from elsewhere) and "trace" it / mess about with it to make it look more stylized and bold. This could be construed as cheating, but "real" artists do it so why not you.
Secondly you could use a 3D rendering package. Since you are only doing a few pictures you can afford the time to make them as detailed as the package can handle (which over the number of frames a movie has could have caused it to take days to render) and you can edit them extensively.
Third I suppose you could scavenge pictures from magazines, video tapes, and the net and assemble them into a sequence. You would have to be careful that they are in the same sort of style though to avoid jarring changes.
Fourth there is Commander JCs method, explained in detail on his page. He has created a XvT mission which with the use of a patch to enable you to fly all craft (or most) enables you to positions ships nicely to make good screenshots which you can use to illustrate your cutscene. You would need to edit them for FX, but this is a perfectly good, usable, and inventive method.
Whichever method you use you must ensure that the actions of the ships are obvious and dramatic. You should explore the different options of your paint program, sometimes a simple effect can make things look dramatically better.
This is really just a slide show, but with additional touches like limited movement or flashing lasers.
This type could be used by people who have done a movie but want to provide a smaller alternative. To convert a movie to a flickie simply take every 15th frame (though if there is a good picture a few frames either way then use that) and resmack these frames at 1 frame per second and then remix in the soundtrack.
Alternately since there will be about a fifteenth of the number of pictures to be generated this is a viable option for making with your layer supporting art package. Move the layers around, scale them, switch them on and off to have flashing elements.
If you have seen any anime you will remember that occasionally they go into slow motion to show extra drama to that point (not describing it well, haven't actually seen many). That is the sort of thing that has popped into my mind.
Sound is a vital part of the cutscene even if most people would rather use text than listen to their own voices.
A tip, sent by Matthew Pate, for an alternative (or enhancement) to the use of text would be to use the voice messages from the games, or indeed samples from the films.
The ear is a funny thing though and it is difficult to predict what sounds are needed to make the scene work, and which wouldn't be audible unless you made them too loud. This means that you should be prepared to mix the sound into the animation several times (at least) and have several versions of the soundtrack (with and without different sounds) on the go. For the music I have been using the XvT Tracks, and for the sound effects mostly the wave files from the game. Don't be afraid to use different sources though, nor be afraid to edit the effects to make them sound more like you want.
First thing to do is to get the music as this forms a nice
base on which to build. It is a good idea to keep a duplicate of
the music so that if you find that the music has been overpowered
by the other sounds you have added you can simply add the music
to the soundtrack again (though probably not at full volume) and
Next thing to do is to look for flybys of the camera. Check the frame at which it occurs and take a few off. Work out what the time is at that point and mix in the flyby sample. If there is more than one flyby then try to vary the volume according to how fast the ship was going, and how close to the camera it passed. Once you have done this you may as well mix the sound and pictures and see if all is well.
Assuming this is the case you should then add the laser / missile sounds in the same way, and then the explosion(s). Again try to make those farthest away quieter than those closer by. Mix in and check for the timing again.
Now any special sounds like S-Foils moving or a ship entering/leaving hyperspace should be added. These can be fairly quiet sounds, they may be drowned out by the other noises, so add them if the event occurs close to the camera.
Finally should come the engine noise. I say this because I have found that unless there are some quiet bits the engine noise is not really needed, and can act to deaden the sound of the background music. If there is a need though you should take the sample from XvT which is constant in volume and edit it so that the closer to the camera the ship is the louder the noise of the engines. You should be fairly strict with the engine noise and only have ships engines audible if they are really quite near the camera.
This should have produced a nice soundtrack but remember that the amount of noises you need depends on if it is a movie, a flick-screen, or a slide-show. A movie will probably require a lot of effects, a slide-show will be better if you stick to it being mostly just the music.
Experimentation is the thing.
Once you have created the cutscenes all that remains is to make the game use them. The cutscenes live where you would expect, in the movies directory. You will need to edit cutscene.lst which helpfully does have a definition near the top. The first thing to do is to alter the number representing the number of movies there are to show that you have added some. Next you should go to where you want to add your lines (I suggest the bottom) and add the following : A Comment showing which cutscene it is, the filename of your cutscene (you don't seem to need the .smk), a line showing the campaign number + if it should be shown before or after a mission + the mission the second number refers to (as it says in the definition in the file), a name for the bitmap which will be shown on the cutscene screen, and finally the text that will be shown on the cutscene screen. A total of 5 lines per cutscene.
Now you should go into the frontres directory where the bitmaps for the cutscene screen will be held. You need to edit top.lst to add a line for each cutscene showing first the filename, then the name you have defined in cutscene.lst for it, and then a 1 (which again I do not know what it does, but it works and all the standard movies have a 1 there).
Hopefully now the game will now play the appropriate movie at the appropriate time, and will put the little bitmap up on the cutscene screen so that you can replay it inside the game.