Several different ways of ways of doing it. Put the image into a MC, then use a
normal timeline tween...set the alpha property of the MC to 0 at one end and
100 at the other. Search this forum for script methods. Seems like there's
chunks of code posted on how to do this all the time. Lastly, you could use the
Movie Tweening Prototypes (get them at the Flash Exchange) and use the alphaTo
tween...still script, but less of it for you to type.

Hope that helps!