-are you using video clips then making gifs?
I use a variety of sources/methods depending on what it is I'm doing. Existing GIFs, pull from YouTube, rip from DVD/Bluray, MKV pulled from usenet, still images modified/animated, etc.
-do you go frame by frame to add the face?
Yes, for the most part. Sometimes you can use actions (macros) to make things go faster.
-I have photoshop/premier elements 10, will this be enough to do what you do?
Not sure. I still use ImageReady. Maybe someone else can answer? Or try searching for tutorials.
As a starting point, give me an example of what you are looking to do and I will dig into details.