jquery cycle2 initialisation script failing

Question 1

There's a few simple mistakes in your JavaScript that are causing the cycle to fail. When initalising a slideshow programmatically, the parameters need to be camelCase instead of using hyphens like when they're specified using data attributes. You also need to wrap string-based parameter values with quotes otherwise your script will think that they are variables. Here's an updated version of your example that works:

<!doctype html>
<html lang="en">
<head>
    <meta charset="UTF-8">
    <title>Cycle2 Example</title>
</head>
<body>
    <a href="#"><span class="prevControl">Prev</span></a>
    <a href="#"><span class="nextControl">Next</span></a>

    <div class="slides">
        <img src="http://malsup.github.com/images/p1.jpg" data-cycle-title="Spring" data-cycle-desc="Sonnenberg Gardens"/>
        <img src="http://malsup.github.com/images/p2.jpg" data-cycle-title="Redwoods" data-cycle-desc="Muir Woods National Monument"/>
        <img src="http://malsup.github.com/images/p3.jpg" data-cycle-title="Angel Island" data-cycle-desc="San Franscisco Bay"/>
        <img src="http://malsup.github.com/images/p4.jpg" data-cycle-title="Raquette Lake" data-cycle-desc="Adirondack State Park"/>

        <div class="cycle-caption"></div>
        <div class="cycle-overlay"></div>
    </div>

    <script src="http://ajax.googleapis.com/ajax/libs/jquery/1/jquery.min.js"></script>
    <script src="http://malsup.github.io/jquery.cycle2.js"></script>
    <script>
        $('.slides').cycle({
            fx: "scrollHorz",
            timeout: 2000,
            speed: 700,
            prev: ".prevControl",
            next: ".nextControl",
            captionPlugin: "caption2",
            overlayFxSel: "div"
        });
    </script>
</body>
</html>

I'd also probably use an id or a class other than cycle-slideshow when setting up the slideshow programmatically so that it isn't auto initialised by the cycle plugin.

Question 2

You should include a reference to the caption plugin from this page:

http://www.malsup.com/jquery/cycle2/download/

An example is located here:

http://www.malsup.com/jquery/cycle2/demo/caption2.php