[Karakh]

With:
<pictureextensions>
<add>.tbn</add>
</pictureextensions>

and:
<thumbsize>350</thumbsize>

in your advancedSettings.xml and set your screensaver to slideshow, folder to XBMC\userData\thumbNails\Video

[Karakh]

I forgot to mention that this helps prevent further degredation of already bad image quality if like me, you like the paning and zooming:

<slideshow>
<panamount>1.5</panamount>
<zoomamount>2.0</zoomamount>
<blackbarcompensation>5</blackbarcompensation>
</slideshow>