Dear Ben,
Yes this can be done by adding a little css to the 2 image DIVs so that they overlap on each other (setting position absolute or fixed based on your requirement)
An example of how the overlapping should look like can be seen here:
http://jsfiddle.net/skandie/h0kk4tvo/
Please note that I have also added the animation classes on the DIVs. But since the plugin is not loaded on the fiddle page, you would not be able to see fade-in animations there.
Just copying and pasting the html and css should work for you. Then change the css to set height and width of the images and DIVs accordingly.
Let me know if this works for you.
Please don't forget to rate the Animate-it Plugin.