I quickly got bored with Apple's default photo screen saver and found one I liked better, namely Carousel, which is part of the XScreenSaver collection. Unfortunately, this screen saver doesn't support iPhoto albums, so you have to point it to a folder. You can point it to your entire iPhoto Library, but then you get everything instead of your album of favorites.
I'm not about to copy over 1 GB of photos into one folder just so I can have my favorites in a screen saver, so I decided to make a folder of aliases. Unfortunately, regular Finder-created aliases don't work; you have to use UNIX symbolic links. (System Preferences crashed when I set the screen saver to use a folder full of Finder aliases.) I was about to teach myself Perl so I could extract the 700+ file paths from AlbumData.xml in my iPhoto Library and create symlinks from them, but then I found a hint about burning iPhoto CDs using aliases.
I tried it out, and sure enough, the iPhoto Selection folder in the iPhoto Library was filled with symbolic links (not Finder aliases, but the Finder doesn't seem to know the difference) and my third-party screen saver recognized the photos. This setup sometimes causes System Preferences to crash when you set the pictures folder, but I haven't been able to figure out exactly why. Maybe it happens when iPhoto is open and the screen saver first accesses the photos. I haven't fully isolated the issue yet, so it could just be a bug in the screen saver I use. Here's a summary of the steps I took:
Mac OS X Hints
http://hints.macworld.com/article.php?story=20070809111800838