As it stands, every time the images are rotated you schedule the next time that they will be rotated. This makes it difficult (impossible?) to stop the slideshow.
The best way to do it would be to use setInterval instead.
That way, you
(a) can set a consistent 3 seconds between the start of rotate events (instead of starting the next event 3 seconds after you finish the current event)
(b) get an identifier that can be used to stop the timer.
So next, you simply call clearInterval when you get an mouseover event. Then you call setInterval once more when you get a mouseout event.
var rotateTimer = setInterval(rotate, intervalMs);
rotateTimer = setTimer(rotate, intervalMs);