There's a lot of code to go through on that site, if you could post the relevant code here, it would be a lot easier to see what the problem is.
Until then, this may solve your problem:
var i;
for (i in document.images) {
if (document.images[i].src) {
var imgSrc = document.images[i].src;
if (imgSrc.substr(imgSrc.length-4) === '.png' || imgSrc.substr(imgSrc.length-4) === '.PNG') {
document.images[i].style.filter = "progid:DXImageTransform.Microsoft.AlphaImageLoader(enabled='true',sizingMethod='crop',src='" + imgSrc + "')";
}
}
}
Put this in $(function () {});
and it should add the filter to each image so that the opacity doesn't mess up and produce black.
If this doesn't work, take a look at: jquery cycle IE7 transparent png problem .