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The config file path has changed since.

now you have to edit: /usr/share/applications/screensavers/personal-slideshow.desktop

 

(Open folder as administrator and change the permissions to read and write first by right clicking and clicking properties then permissions. Now you can open it with gedit and modify it)

There's the line:
Exec=/usr/lib/gnome-screensaver/gnome-screensaver/slideshow --location=Pictures

Change "Pictures" to your screensaver pictures folder.

For example, in my case the line is:
Exec=/usr/lib/gnome-screensaver/gnome-screensaver/slideshow --location=Pictures/screensaver/

the subfolder "screensaver" contains symlinks to the folders that I want to include in the slideshow.

 

Thanks to geoffm

 http://ubuntuforums.org/member.php?u=681237

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