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Unfortunately, this settings has been removed from the default photo screensaver.
However, it may be available in Windows Live Photo Gallery. www.download.live.com
This program is a great picture manager/editor and has a screensaver similar to the default one in Windows 7.
Hope this helps.
We definitely need to find a 3rd party screensaver then..
Actually IF you can get on a Windos XP machine, and find the photo screensaver in your Windows/system32 folder, and copy it over to the Windows 7 machine, it may work.
You might just be able to grab it by searching on Google.