UV Offset modifier is outdated. It was replaced by newer UV Warp modifier. You can find some info on using UV Warp modifier here.
I'm working on UV Offset modifier for Blender. This modifier is intended to be used for cut-out style animation.
For performance it is written in C language. It's not an addon written in Python. The only thing modifier does (as suggested in name) is translating UV map by an offset.
The modifier can be seen in action on this video:
Modifier (old version lacks x and y offset) has these input fields:
X - horizontal offset
Y - vertical offset
Target - target object defining offset
Bone - if target object is armature you can use bone position for defining offset
Vertex Group - defines how much offset is applied to vertex of UV map. Vertices with weight equal to 1.0 are translated by sum of target position and x and y offsets, vertices with 0.0 weight are left unaffected. Vertices with weight between 0.0 and 1.0 are translated proportionally to weight but as for now I can't find usefull setup for these intermediate weights.
UV Map - defines which uv map should be translated
You can watch the tutorial on using modifier here:
The blend file can be downloaded here: UV Offset Tutorial (7-zip format).
If you like modifier leave a comment on Blenderartists forum. The more positive coments the bigger chance that modifier gets into official Blender build someday.
If you are familiar with Blender code please take a look at my patch and let me know if you find any problems with it. Patch (for Blender 2.62) can be downloaded here.
There is also patch for Blender with BMesh (from version 2.63).
Short animation done using modifier: