Hmmm,  Bryce 5 is still free, and materials animation works fine there. 
"When animating keyframes in the different labs, applying keyframes to all timelines does not apply the keyframes to the main timeline. There is not workaround at present. Affected versions: All. 
    Does this  mean that animation keyframes won't work in any lab, including the terrain/lattice editor? The reason I ask is that I was going to suggest a workaround animating a terrain instead.