it's an overlapping issue. I guess nivo jquery slider is not properly compatible with fancy category module.
You can try another alternative
http://www.flashxml.net/banner-rotator.html but it's FLASH based & not jquery. The above site offer free version also & if you don't want logo to be shown then it's very cheap also...just $12 I guess...but very powerful & nice effects too
By the way your user name "sdfjlsdfsdf" on this forum is to funny
...I use such user name while testing of form registration process only
