I have a question concerning how to setup the preloader, the way I understand it is you create a new layer called preloader or anything along those lines.

For the first 20 or more frames you add all of the sites images on the outside of the movie screen.

Now, I have a set of GIF’s that I imported into my project, and for each GIF I created a graphic for each one. So now I have a set of the real GIF images, and a set of graphic instances of the GIF images.

Do I use the real GIF images or the graphic instances around the outside of the movie screen for the preloader frames?

If anybody could help me I would be grateful.

You are going about preloading all wrong (unless I missed something or misunderstood what you are doing). You only need 1 or 2 frames to preload.

If you search this site for tutorials you can find a couple on preloaders that should teach you how to make them.