You should reset src attribute of animated gif instead:
Note that you shouldn't set variables as global if you don't need to access it from global scope.
$(document).ready(function () {
gifAnimated = $('#background img')[0],
gifSrc = "http://mlkshk.com/r/R245.gif";
$lrgBanner = $('#panel');
$lrgBanner.detach();
$('#banner img').click(function () {
gifAnimated.src = gifSrc;
$lrgBanner.appendTo('#ad').show();
$('#banner').hide();
console.log('banner was clicked');
});
});
$('#close img').click(function () {
$('#banner').show();
$lrgBanner.detach();
gifAnimated.src = "";
console.log('close was clicked');
});