Like you, I don’t know JS well enough to fix this, but if all else fails, you could try out jQuery Cycle, which is a very reliable alternative to this. It is a bit heavier on code (as you have to link to the jQuery library—preferably on Google) but it works nicely.
I think the problem is in the example script, which you have used. When you visit that example page (the ‘updated’ one), the first sequence of images are uncontrolled, after which they seem to come together and cross-fade OK. Anyway, I think I found the problems in the init function, and your adjusted page is below. If you are interested, significant changes are marked with double asterisks. A few minor/cosmetic changes were also made. I haven’t checked your CSS, but make sure all your slideshow images have position: absolute.
Those lines which toggle the display property between ‘block’ (for the active image pair) and ‘none’ (for any passive images) are not really required, so they are commented out. The script is using opacity to control what the viewer sees, so there seemed little point in also setting the images to display:none while they are passive, when the viewer can’t see them anyway as their opacities are zero.
Hmmm … thanks for mentioning that … I didn’t look through the CSS file, but just mentioned (at end of my first paragraph) the need to absolutely position the images. But having just checked, the existing CSS does not have that, so it will need the following addition:
#rotator img { position: absolute; }
… so as to ensure all the images do sit atop one-another and can cross-fade. I did simplify the div styling for this example, but the cross-fading works perfectly.
This script does actually work by having all the images stacked one-atop-the-other. All but 2 of the images, at any one time, have opacities of zero, hence are invisible. The other 2 are the currently cross-fading images. That’s why I couldn’t see an additional need for the display toggling - the opacity is doing all the work. Anyway, I did check it in several browsers, and those 3 commented display-setting lines make no visible difference to the cross-fading, whether they are in or out.