Using Core Animation you can crossfade between two images.  The image on top is image1 and the bottom image is image2.

//This will fade image2 into image1 whenever it is called.

- (void) crossfade {
    [UIView beginAnimations:nil context:nil];
    [UIView setAnimationDuration:.5];
    imageView1.alpha = !imageView1.alpha;
    [UIView commitAnimations];
}

//  This will remove the 1st image and fade into the 2nd.
- (void) crossfade {
    [UIView beginAnimations:nil context:nil];
    [UIView setAnimationDuration:.5];
    [UIView setAnimationDelegate:imageView1];
    [UIView setAnimationDidStopSelector:@selector(removeFromSuperview)];
    imageView1.alpha = 0
    [UIView commitAnimations];
}