Dear Carroll and Cedric,
I have had exactly the same problem with slideshows on my two sites, now with HostExcellence (see for example http://briangrassom.com/Painting.html
and other photo pages on that site). This only began recently, so I'm not sure if it is coincidental with upgrading to Lion 10.7.4, or moving from the MobileMe server to HostExcellence.
But I have checked in the 'sites' folder opening the 'index.html' file on my Mac from which the websites are uploaded via Cyberduck to HostExcellence, and the problem is there as well: so, it looks like it may be something to do with iWeb (I have version 3.0.4) and/or Lion? - particularly if Carroll has the same problem and has not yet moved to HE.
The slides will display full screen (in which they are set in iWeb's 'Inspector') immediately upon opening the slideshow, but invariably they will display much smaller (too small) if the show is re-opened in the same session, or if I move to another page's slideshow.
Our slideshows open in Safari exactly as yours do (nice site, BTW). Any slideshow will again open correctly if Safari is quit & launched again, or if the cache is emptied. I'm revising the site, so a current URL is http://www.frisons.org/Frison_Photo_Pages/Forest_Trail.html
We moved to iCloud from MobileMe sometime before January, 2012, and looks like we moved to HE about mid-April. We're moving our albums (now galleries) to Zenfolio. I don't know when the problem began.... Lion? New version of Safari?
20-inch, Early 2009
2.66 GHz Core 2 Duo
17-inch, Early 2008
2.5 GHz Core 2 Duo