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The Smoothgallery module uses mootools toolkit to crossfade images to form a rotating header effect or gallery.
There is no need to move any of the folders from the module itself, this includes the resizer.php file for the thumbnail generation..
1.) Install the module / mod_jp_smooth_gallery / > Extensions > Install > select // mod_jp_smooth_gallery.zip
2.) Configuration - Extensions > Module Manager > mod_jp_smooth_gallery
3.) The slideshow is preconfigurated for this Template, please change the Module Position to // INSET // and set the Title = No
4.) Upload your images to folder images/smooth_gallery/
5.) Those images will be listed in the module administrator and you can select them to be shown in the slideshow