so my friend replaced the images with animated gif's that started out as the orignal images, but flipped over to be adult material.

Good idea. That's what I'd do. I guess you're right it could just be stolen HTML. Pretty tactless for four people to do it though. At least the follow-ups changed "Usually sells for $899" to "Initially sold for $1199." That's still pretty misleading, although not as much of a blatant lie as "usually sells for $899."

I wouldn't be surprised to see them going for even more in the future now that the stock is depleted. The guys who got them at $199 were just happy to more than double their money.