Hey there, I've got a little workaround for this issue :)
I had the same problem but in my case not using transparent images was not an option, s
o here's what I did:
I created a blank transparent GIF and placed it in the html between each photo, like this: <img src="Image1.gif" alt="" />
<img src="blankGIF.gif" alt="" />
<img src="Image2.gif" alt="" />
<img src="blankGIF.gif" alt="" />
...and so on. Then in the JavaScript I decreased the pauseTime var to 1 and increased transitionTime var to 1000. It's really hard to notice that there's a blank image between each photo and the transitions work just fine.
I'm posting this here just in case my silly workaround results useful for anyone. :D
Anyway I'm thankful to MenuCool team for creating and sharing this wonderful script!