A cursory glance at the plugin's documentation yielded [this example](http://jquery.malsup.com/cycle/pager10.html), which seems close to what you're aiming for. Alas, no fade...

Anyway, I tinkered a little with it, and this works. It's not elegant, but that's mostly the plugin's fault...

 $(function() { 

 $('#slideshow').cycle({ 
 fx: 'fade', 
 speed: 1000, 
 timeout: 6000, 
 pager: '#nav',
 pagerEvent: 'mouseover' 
 });
 
 // retrieve plugin data (i.e. the speed params)
 var data = $('#slideshow').data('cycle.opts');
 
 // bind navigation mouseenter to increased speed and vice versa
 $('#nav').bind('mouseenter mouseleave', function(e) {
 if (e.type == 'mouseenter') { 
 data.speedIn = 100; 
 data.speedOut = 100; 
 } 
 else { 
 data.speedIn = 1000;
 data.speedOut = 1000;
 }
 });
 
 });

Also, lose the "InitializeCycle()", right now it's just a useless wrap. Maybe consider using a different plugin altogether. Oh, and one more thing: nice page design!