How to use slideshow feature
Go to admin > system > design > banners , there you can either edit or insert banners to be used in your Slideshow.
When you click insert (or edit) you will be taken to the banner page. On that page you have to add or insert more images by clicking "Add banner".
After you've uploaded your images in the banner area (it is best if the images are the same size) , navigate to extension > modules.
There, click edit on the module Slideshow. Then click add module , and in the first column , its asking you to select a banner. So, there you'll select the banner you just uploaded and the images from that banner will appear on your slideshow.
The second column in size. Is best to insert the same size for the slideshow , as for your images (if you want it like the one from the demo , the size in 980X280). At layout select first home, and then if you want it on other pages too, click on add module, and add it to another layout too. At position select content top (or some other position on the page that you want), then select Enabled and hit save.