There's a couple of ways to do this. You can copy and paste your images into GIF Animator and apply one of the effects filters. Or you can use one of the Animation Gallery effects on a single image and choose the save option which creates an animation rather than a static image.

Keep in mind that whichever method you select, you'll end up with an animated GIF and the number of colors can be reduced significantly, depending on your original image. You could also consider a java applet that fades one image into the next.

Stephanie's PhotoImpact Tutorials
PhotoImpact 8 and 7 Classes