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Yes it is possible and it should be pretty simple task with AS2 so you don't need to worry about getting started. You will need two sizes for each image, a thumbnail (10x10) and the larger image (150x150). Thumbnails will be used for for faster loading of the grid and the larger image will be loaded upon clicking of an image. For the roll over and press/release handlers of each image, you can use the onPress, onRelease, onRollOver, onRollOut events of the movieclip class (which will contain one image each). For the fading animation you can use the Tween class just google how to use. The 15 minute-time out can be done with the setTimeout function. Time value input parameter is in milliseconds 15s = 15000ms. Then to load the XML data you will use the native XML class that AS2 provides.
For loading images, you can use the MovieClipLoader class. Flash's help files have complete documentation about the different classes and can provide most of the information you will need for this project. If you want to load the images in a particular sequence, it would be best you create a Image queue loader, or you can search online for examples.
Thanks Harry that's a great response. I'll get started and come back with questions (no doubt!)
Sure no problem.