Has some problems under Karmic Koala (e.g. the thumbnails are not shown, crashes if you delete a selected image). The list of enabled images is kept in
Seems to not work in Karmic.
It is a panel applet which shows a small thumbnail of the current active image. It will show images from your selected directories (in the preferences) plus all images in
~/.gnome2/backgrounds.xml (see #355081). Seems relatively stable and is my preferred choice among these 3.