Sounds like a job for Javascript. Google for "image swap Javascript". One
of them, I'm sure, will have customizable transitions to include fade in
and/or fade out.
See "JavaScript/Dhtml Bits FadeIt Bit... download" at http://www.pwidgets.com/phpbits.php. I don't know if this is what you want,
but googling for javascripts that "fade" or "transition" or "mouseover" might
locate a script that does what you want.
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