XP has a setting that allows you to 'stretch' your screensaver to fit the entire screen. I am very surprised to see that this option has apparently been eliminated in Vista, (although I can't image why). I use Microsoft Office Picture Manager which is a GREAT photo editor -- and I just 'resize' the photos to fit the screen. You can use one of their choices of screen size, or customize your own. Trial and error, pretty much, but it works.
PS, lemur is right, if the photos are too small, it won't work well because they'll appear blurry.