Yes, I definitely also recommend Webshots. First, it's free. Second, you simply set up a photo list of photos already stored somewhere on your computer. They will change your desktop automatically, at whatever timed interval you set. Third, you can also display a calendar with several options.
Mine is currently set up to cycle through about 200 of the photos I took on our last vacation. It's set to change to a new photo for the desktop every 4-hours.