First, it does not seem like pictures cataloged by updatemedia will be shown in the LinuxMCE Picture menu unless they are in the /home/public/data/pictures directory. When the window share drives were discovered, I decide not to use the LinuxMCE file structure (ane move all my pictures into this structure) but instead just to make all the content public. By default this places the windows share under /home/public/data/other/. Even though all the pictures are in the media database under /home/public/data/other, they would not appear in the Picture Menu.
In order to resolve this problem I created a symbolic link in /home/public/data/pictures to /mnt/device/33/ where 33 is the device which is my windows share for my pictures. This seemed like it should work but it didn't. I discovered the problem when I manually synced the media by using the LinuxMCE admin ->Files & Media -> Media Files Sync -> Resynchronize command. The updatemedia command was not fully cataloging my pictures. OK I have over 10,000 pictures so this may have been a tall task. Part way through the process it halted. This meant that only part of the directory structure was being cataloged and no pictures would appear. By moving down through the file structure and perform several smaller runs of updatemedia I was able to catalog all the pictures. Then one full at the root directory, which seem to only catalog some of the root directories, made all the pictures appear!
I'll try to make a wiki update to document this strategy but I though I would post a reply here. Now to get the pictures to appear on the screen saver and removed the stock flickr photos! I seem to remember a wiki entry on this topic!