I checked the source for the gameduino project and they seem to store the sprites in ProgMem like you said.
Would that be a slower method than SRam? Would SRam be preferable if enough were available?
Also how quickly would I be able to refresh a colour lcd screen. Would this depend on how much processing power were available? So if I upped it for example by using multiple arduinos with an i2c would I be able to refresh the screen faster?