True, you can always go for the tried-and-true method of hand-drawn keyframe animation, using a light table, pencil, and paper before scanning to your computer. But if you'd rather stay purely digital, then I'd recommend getting a graphics tablet. Graphics tablets are nifty little devices, and you can draw your animation right on the screen using onion-skinning in lieu of light-table-induced transparency.
Tablets aren't even that expensive anymore, although the premiere of the industry, WACOM, still charges a hefty amount for their top-of-the-line tablets. You don't need a WACOM tablet to get started, though. For years I've been using the SuperPen tablet, available for only $49.99 at most retailers (I bought mine at ThinkGeek). It's a sturdy little tablet with a fair-sized drawing area, digital pen, and electronic wireless mouse. My SuperPen's stood up to some pretty harsh treatment, and it's got a high level of pressure sensitivity with drivers that interact well with most programs. For something a little larger, though, I've recently graduated to the Adesso 12x9 CyberTablet, which ranges in price from $126-$156, depending on where you buy it. Other tablets with a drawing area as large as 12x9 tend to run close to $500.
Upgrading to a tablet can save you a lot of time and trouble, and can make working with frame-by-frame animation in Flash as much as ten times easier. When you can draw directly on the screen it saves you the trouble of scanning, sequencing, and vector-tracing your bitmaps.
And last I checked, the most sophisticated "undo" function available with any pencil is an eraser.