iWeb Slideshow Modification
It appears that the iWeb slideshow does need to be modified if you created it with the latest version (3.0.4) of iWeb.
See this page for more info...
http://www.iwebformusicians.com/Banner-Slideshow/iWeb-Slideshow-Assets.html
... and this one for Old Toad's tutorial which will guide you through the process...
http://oldtoadstutorials.net/No.26.html
See this page for more about iWeb and Mountain Lion...