After investigation I found that it will not work with DataList as this plugin only works with Unorderedlist <ul> and DataList cannot render it properly. So you will have to use Repeater
Demo: Implement carousel Image Gallery in ASP.Net using jQuery jcarousel Plugin
<html xmlns="http://www.w3.org/1999/xhtml">
<head id="Head1" runat="server">
<title>Untitled Page</title>
<script type="text/javascript" src="http://ajax.googleapis.com/ajax/libs/jquery/1.8.3/jquery.min.js"></script>
<script type="text/javascript" src="http://cdn.jsdelivr.net/jcarousel/0.2.8/jquery.jcarousel.min.js"></script>
<link href="http://cdn.jsdelivr.net/jcarousel/0.2.8/skins/tango/skin.css" rel="Stylesheet" />
<script type="text/javascript">
$(function () {
$('#mycarousel').jcarousel();
});
</script>
</head>
<body>
<form id="form1" runat="server">
<ul id="mycarousel" class="jcarousel-skin-tango">
<asp:Repeater ID="rptImages" runat="server">
<ItemTemplate>
<li>
<img alt="" style='height: 75px; width: 75px' src='<%# Eval("ImageUrl") %>' /></li>
</ItemTemplate>
</asp:Repeater>
</ul>
</form>
</body>
</html>
protected void Page_Load(object sender, EventArgs e)
{
DataTable dt = new DataTable();
dt.Columns.AddRange(new DataColumn[1] { new DataColumn("ImageUrl") });
dt.Rows.Add("http://static.flickr.com/66/199481236_dc98b5abb3_s.jpg");
dt.Rows.Add("http://static.flickr.com/75/199481072_b4a0d09597_s.jpg");
dt.Rows.Add("http://static.flickr.com/57/199481087_33ae73a8de_s.jpg");
dt.Rows.Add("http://static.flickr.com/77/199481108_4359e6b971_s.jpg");
dt.Rows.Add("http://static.flickr.com/58/199481143_3c148d9dd3_s.jpg");
dt.Rows.Add("http://static.flickr.com/72/199481203_ad4cdcf109_s.jpg");
dt.Rows.Add("http://static.flickr.com/58/199481218_264ce20da0_s.jpg");
dt.Rows.Add("http://static.flickr.com/69/199481255_fdfe885f87_s.jpg");
dt.Rows.Add("http://static.flickr.com/60/199480111_87d4cb3e38_s.jpg");
dt.Rows.Add("http://static.flickr.com/70/229228324_08223b70fa_s.jpg");
rptImages.DataSource = dt;
rptImages.DataBind();
}