I think your markup is wrong. Try something like this:
<div id="slideshow">
<div id="nav"></div>
<div class="slide">
<?php print $node->field_test1_image[0]['view']; ?>
</div>
<div class="slide">
<?php print $node->field_test2_image[0]['view']; ?>
</div>
</div>
Note that id="slide" is changed to class="slide" - there should be only one element with unique ID ;)
EDIT: I forgot to mention that the #nav was dissapearing on second slide, because you put it to the first slide wrapper.