Choose the "Photos" screen saver option in the S/Saver dialogue (under
"Personalization" Right Click desktop, select "Personalize" then choose
Screensaver), and then under "Settings" point it to the folder containing
the photos. I think the default folder is "My Pictures" but it can be
changed to whatever folder you like.
The Photos s/saver option on my system is listed between "Ribbons" and
"Mystify".