Is probably because this plugin recently updated Colorbox script and that one is not compatible with your 3 year old WP install :)
Current version: 1.3.20 ( Released under the MIT License | Github | Changelog )
Tested in: jQuery 1.4.3+ in Firefox, Safari, Chrome, Internet Explorer 6, 7, 8, 9, Opera 11.
For older versions of jQuery (1.3.2+), use version 1.3.18
Your WordPress install is 2.8.4 and use jQuery 1.3.2, best of 2009.
So you are in a hole but might be able to stay there if you use old plugin version. Or perhaps replace colorebox script with 1.3.18 as colorbox dev. suggest.
But most will scream Nooooo!
Site does not seem to have much JS stuff, except Nextgen, but possible your old theme will go crazy on latest WordPress. Or other PHP stuff. Dont know, test carefully. Take full backup so you can restore historic code. Newer theme or fix for old could then be tactic.