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Thanks for this!

I have all the sprite packs installed and have an issue where certain sprites are sometimes replaced by enlarged ships etc on certain scroll levels. Not just armies though, also colonists.

Is this the sort of issue that your fix rectifies?
 
No. As the OP states, this pack fixes animation issues, that is that some sprites did not move. Yours appears to be unique to your installation, and I suggest you start a fresh thread in Tech Support about it.
 
That said, you should absolutely apply this fix if you have the affected sprite pack.
 
Is this hotfix incorporated into new downloads? In other words, if I just purchased this, is the hotfix still needed?
 
I don't know. If you discover the answer (ie have or do not have the bug) let us know here and I'll update the thread accordingly. Thank you.
 
Alright, haven't noticed any problems but will report back if I do. Thanks!