I believe you’re correct that relying on mouse hover position would not be precise or reliable. Auto-cycling the pics should have what any continuous animation should have: obvious controls to pause and play. Users can stop and start the slide show when they want to. This can be combined with automatically pausing when the user clicks a thumbnail (or experiential pic), as others on this page have suggested. However, an explicit pause/play control will make it clear the user can pause the animation. Clicking an image has poor discoverability.
Then there’re users like me who would pause the animation immediately after it loads because animation can be really annoying and has been recognized as such since 1996. This is less of a problem if the list and experiential pic are the only things on the page since then there's nothing for the animation to distract the user from. However, if there's text to read above or below the animation, you have a potential problem.
Have you considered no auto-cycling? Show the most compelling experiential pic by default or, if the users are coming from a search engine, try to choose the pic that best fits their respective search criterion. Alternatively have no experiential pic on the home page, and use the space for an enlarge service list so the user can appraise each item better. Make each item a link to the associated experiential pic on a separate page with small links to the other services below. Some users may click Back to return to the original page to choose the next service, assuming users are interested in more than one service. This would add a click for some users, but that may be better than users having to figure out if and how they can control the animation.
I frankly don’t understand the activity that auto-cycling is supposed to support. Do we really expect users to passively stare at an animated list like they’re watching television? A service list doesn’t sound like a narrative that needs to unfold at a set pace in a set order. If an item of (mild) interest cycles off the experiential region, you really expect users to wait until it comes around again? That may be enough to negate any modicum of enthusiasm the user has mustered. It’s counterproductive.
Perhaps the concern is that a default non-animated experiential pic will cause users to click Back because they assume the site offers only one service (that's not the one they want). Given how fast users click Back, I doubt animation will help: if each experiential pic is up long enough to assess if it's the right service, then it's up long enough to click Back before the user has time to see another service appear.
Users have a mouse in their respective hands and they use it unthinkingly. I believe they’d rather scan the service list and pick the items that seem of greatest interest in the order they choose, and look at them for as long as they like, rather than wait for the items to appear on their own and intervene to prevent an item of interest from disappearing. With interest in each service varying considerably from user to user, it's a real challenge to find the right cycling frequency without some experiential pics appearing for too long and others for too little.
