I have tested this code for a photo screen saver and it works great!
http://blogs.msdn.com/coding4fun/archive/2007/05/11/2553866.aspx
I plan to add some features and post the revised code here in the coming weeks. If you need the compiled version, click here for a zip file (19 KB). You will need the .Net 2.0 framework installed for this to run.
Here is a screen capture of the running screen saver
