jquery cycle plugin for Magento theme grayscale

jquery cycle plugin for Magento theme grayscale

Hi there,
I am a newbie to all this javascript and web dev so I hope the following is phrase well and that I can get help here:
I have a Magento grayscale template installed on my site:
you can see a demo of this template here:
and understood that I need the jQuery Cycle plugin to be installed on my system.
So first batch of questions: how do I know if it installed already or not? if not how do I install it?
I did find the following js files:
1. cycle-fade-effect.js
2. jquery-1.5.2.min.js
3.slider.js


and the jquery plugin used in the demo is 1.3.2 (this is what I understood from watching the source)
so do I need to upgrade the jquery plugin to 1.7.1 or above as I read in:  http://jquery.malsup.com/cycle/download.html

after installing how do I make the banner show images?

Well I do hope I am in the right place to post those questions and that I phrase them correctly.

thanks,
Mimo