http://jsfiddle.net/7jJe3/
function timeoutfn(currSlideElement, nextSlideElement, options, forwardFlag) {
    var imgtime = 5000;
    var blanktime = 2000;
    if ($(currSlideElement).is('img'))
        return imgtime;
    return blanktime;
};
$(function() {
    $('#slideshow').cycle({
        fx: 'fade',
        speed: 400,
        timeoutFn: timeoutfn
    });
});
I tweaked the code to check if the image was the last one within a container div, and if so, pause on it.
function timeoutfn(currSlideElement, nextSlideElement, options, forwardFlag) {
    var imgtime = 500;
    var blanktime = 7000;
    var lastimg = $('#heroimg img:last');
    if ($(currSlideElement).is(lastimg))
        return blanktime;
    return imgtime;
};