Hello Buntu Bunny (I remember you from another thread... I'm glad you were able to install Ubuntu 12.04 on your new laptop...)
Here is another option for you:
The default screensaver in Ubuntu 12.04 (gnome-screensaver) does not have the option to show user photos. But you can easily replace it with another one that does, for example XScreenSaver. Not only XScreenSaver allows you to show user photos, it has hundreds of nice screensaver options (including even one with the Windows blue-screen-of-death...).
To do that, first remove the gnome-screensaver:
Then, install XScreenSaver with the additional data for the screensavers:
sudo apt-get remove gnome-screensaver
Reboot, and you are done.
sudo apt-get install xscreensaver xscreensaver-data-extra xscreensaver-gl-extra
You can launch XScreenSaver manually by typing:
The option to select a folder with photos is in the 'Advance' tab.