Best I can figure, jquery.imageWarp.js was a working title for the script so you should more or less ignore it. I know the demo page mentions and even links to it, but I think when it does it means the current jquery.magnifier.js v1.1 file.
On another front, if you view the demo page (the one on Dynamic Drive) in IE, it works fine.
Now, and I didn't author this script, as far as I can see, the magnify.cur is primarily for IE. Firefox can and will use -moz-zoom-in if magnify.cur cannot be found. But the presence or lack thereof of magnify.cur shouldn't affect the way the script works, just how the cursor looks in IE, perhaps some others. In fact, the path to magnify.cur may be fine, read on . . .
I think your problem (there could be others) is an HTML syntax error, which regardless should be rectified (from your source code, they're all, or most of them, like this and should be fixed):
See that red
<img src="art/BK1005" alt="BK1105" width="200" height="200"
" mark? It just doesn't belong. Some browsers will error correct for it, apparently not IE.
Get rid of all of those and see what happens.