I'm having the same problem. For start I'm using Joomla 1.5 and most everything has a index.php file instead of a index.html and some folders on my server for the site do have an index.html but don't work with the code and css changes.. Also, it seems that the process of getting it to work should begin with getting it to work locally on your pc as I'm doing at the moment.
First make a folder on your desktop and name it "Test Website" wich will become a "root directory". So explaining further, "Test Website" is a root directory.. and whats inside are other directories or additional files.
Second, create a notepad file inside that folder and name it "index.html" and save it as "index.html" with the "all file types" in the save options selected. This makes it an actual .html document type for browsers to read without just displaying the text.
Third, right click the file and select edit, and copy and past the code insde the " " below into it and save it again.(-don't copy the " ")
"
<html>
<head>
<link href="js-image-slider.css" rel="stylesheet" type="text/css" />
<script src="js-image-slider.js" type="text/javascript"></script>
</head>
<body>
<div id="slider">
<img src="images/image-slider-1.jpg" alt="Caption for slide 1" />
<img src="../images/image-slider-2.jpg" />
<a href="http://www.menucool.com"><img src="images/image-slider-3.jpg" /></a>
<img src="images/image-slider-4.jpg" />
<img src="images/image-slider-5.jpg" alt="Caption for slide 5" />
</div>
</body>
</html>
"
Fourth, take the files you downloaded from the menucool site and copy and past the "images" folder into your "Test Website" folder
Fifth, also inside the files you downloaded from the menucool site, should be a "themes" folder. Open it and open the "5" folder and copy and past the three files inside into your "Test Website" folder. Then move the loader.gif that you pasted into the images folder(yes the one in the "Test Website" folder).
Lastly, you need to make some mods to the .css file to make it all work, but the base for everything is nearly complete.
So open the js-image-slider.css file in the "Test Website" folder(the one with the cog wheel on it) by right clicking on it and selecting edit.
Find the code below this paragraph once your inside the "js-image-slider.css" file, (which will be eddited in line 18 in the document) and change whats in the ( ) to this (images/loading.gif) and save the document. The reason for changing it is because we moved the "loading.gif into the "images" folder and I wanted to teach you some css. So, we needed to edit the js-image-slider.css file so the webbrowser will look inside the images folder since the "loading.gif" isn't out in the open with the rest of the files/folders inside the "Test Website" folder anymore... its in the "images" directory. By doing this you should begin to understand how important it is to edit .css files and how to make it direct to the proper locations so things will work when you try this on your website with a more complicated arrangment of file locations.
Here is the code I mentioned, just edit what I explained above.
#slider {
width:700px;height:306px;/* Make it the same size as your images */
background:black url(loading.gif) no-repeat 50% 50%;
position:relative;
margin:0 auto;/*make the image slider center-aligned */
Lastly save the "js-image-slider.css" file and your done with everything. All you have to do to see that you have done everything correctly is to open your "Test Website" folder and right click on "index.html" and select "open" with explorer and you should see this happen <click the link to the right>
I hope this was helpful. Once you get this down then you can try and tackle how to add this to your site. I havn't figured it out yet because I have many root directories and php files, css files, and template css files... and even finding the right files to edit could end up not working if you have improprer .css code due to typo's ect.