The Animation Panel appears when you switch to Animate mode. It displays a timeline and playback controls/options for the currently selected animation (notice the currently selected animation in the Hierarchy Panel in the image above).
The timeline only displays objects and properties that have been keyed.
The top of the Animation Panel shows playback controls on the left (Play/Pause, Back to Start) as well as the current position, frames per second, and duration of the timeline on the right.
Directly below the Animation Panel header, on top of the timeline, you'll see a scrollbar with two grabbers on each side. This control allows you to resize the zoom level of the timeline by manipulating the grabbers.
Alternatively, hold SPACEBAR and click and drag to pan in the timeline, just like on the Stage.
Objects and their properties appear in the timeline once they have been keyed. To set a key, press the key button which appears in the Selection panel next to all properties that can be animated.
The key button has three states:
Changed (only if AutoKey is disabled)
You can also key your current selection using the following shortcuts:
Keyed objects each appear on a single row of the timeline. Expand each object to reveal additional rows for each keyed property. The keys for each of these properties appear on the right hand side.
Note that the first row of the timeline is always the name of the current animation you are working on. The keys that appear on this row represent all the keys in the rest of the timeline below. Use these as a quick way to move all keys.
On the top left hand side, below the Animation Panel header, you'll find a number of buttons that toggle timeline functionality.
When AutoKey is active, changes made to any object's properties are automatically set as keys in the timeline at the current position of the scrub bar. The AutoKey function is enabled by default. When disabled, use the Set Keys method described above.
Enable this toggle button to view only the currently selected objects in the timeline.
When enabled, animations will loop back to the beginning when they reach the end.
Enable this toggle to play back only a specific section of your animation. When Loop is enabled, playback will continuously loop in the Work Area.
Enable this button to toggle between the regular timeline view and the Curve Editor view. The Curve Editor view shows a value graph of a selected property. You can select multiple properties to the left of the timeline and view multiple curves. Keys show up in this view along the X axis, just like in the timeline view. However, the keys are positioned up/down the Y axis based on their value. The line drawn from each key shows the in-between values of the animation. Change the shape of the line by manipulating the curve handles on the keys, without having to add extra keys. To view the handles, right click on a key and change its type. By default keys are linear (no handles), which simply draws a straight line from each key. Values decrease/increase constantly (or linearly) from one key to the next. To create a smoother animation, try the Easy Ease preset. This is generally a good starting point, but you'll want to tweak the handles yourself to get perfectly smooth motion.