isn't it a transparency issue? I'm not sure. I had the same thing happen to me before and i think the trick to fix it is to put a background color on the image.
I originally thought it was a transparency issue, but then someone noticed the images were inheriting a grey background from an LI item. I'm just unsure why it is only happening in IE.
The slideshow images seem to be taking on a grey background only in IE 8 and below. Any idea why this would be?
Here's a picture of a side by side comparison of Chrome and IE.
http://img32.imageshack.us/img32/200/screenshot20120823at554.png