This is an easy one to learn..
First, get your main image.... and then the image that is going to be faded.
<--main image.
<--Faded image.
Okay, first, right click in the gray area of Jasc animation shop 3 and past the main image as a new image.
Now, go back to your regular painting area and paste your faded image on top of your main image.
If you need to, you may have to ghost the faded image in order to set it in the right area like so....:

Okay, now you're going to erase the things surrounding the main part of the image from your faded image.
When you've erased what you don't want to show, you're going to end up with an image like this:

Now, take this image (copy) and go back to the animation shop. right click your main image that is there already and go down to paste. Then click "paste after current frame"
Now, what you have before you should quite plainly look like this:

Now, right click the first image and go to "insert image transition." Here you will find many different types of image transitions.

Inorder to make the one above, you need to go to "Fade" and pick the speed you would like.
Your icon now looks like the icon below, but inorder to make it a smooth transition, we're going to right click the first image (image 01) and copy it. Past it at the very end now. Go to the second to last image and right click it, go to "Transition effect" and go to the "Fade" again. Now your image should look like this

and i hope you can understand that... my crappy 10 min written tutorial.
AND OMG! PHOTOBUCKET SUCKS WITH SIZE LIMITS!