I did this a while back, the dragon follows the mouse's movement and the entire body stretches - It has quite a hypnotic effect.

FAQ's on this piece:
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Q: What did you use to make it?
A: This was made with Flash 5, Flash Action Scripting, and some old fashioned creativity.

Q: Will you send me the source file for this or write a tutorial?
A: I unfortunatly do not have the time to write a tutorial and digging through the archives to find the original .fla file is gonna take me more time than I am willing to spend so regrettibly no to both parts of this question

Q: Wouldn't this look great as a mouse pointer?
A: Yes it would - if you have the java skills and patience for that kind of thing (i.e. you are not me whom sees java as an evil thing that takes too much time and effort)

Q: Is there any way I can set this as my background for windows?
A: Yes, embed the dragon into an html file and set the html file as your "active background" this will cause the dragon to be following your mouse where ever you move (it will also leave you with a blinding white back ground so be fore warned )

Q: Can you help me set this as my background
A: Not unless alot of money is involved due to the fact that it takes quite a bit of time to explain the basic principles of embedding a .swf file into an .html file to some one whom has no idea what either of those are (I have been finding this out more and more over the past few weeks and it is wearing me down)

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This dragon's action scripting is based on the "bionic simulation script" done by Luis Pabon (luis@pabon.com).
Credit goes to his marvelous script and the "fish" it was originally accompanied with.