My javascript is a little sketchy, so forgive me*.
What I'm doing is pre-loading 2 images with javascript, and then when one image is mouseover'd, that image's src attribute is swapped with the second images.
You can see it here: Untitled Document
Works fine in most browsers, but I was stupid enough to assume IE would act the same.
* Yeah, I hate those 'pitty me' intros too.