I think you'll find this is just the scaling feature rather than anything to do with zooming. Way back when, the photo screen saver couldn't handle pics greater than 1024 pixels (I think, can't remember if this is vertical, horizontal or both!).
When you put pics in there that are larger than this, it would start cycling back and forth between 2 specific pics, for ages, before moving on, or even between a black and white screen. This was fixed up simply in the latest release by adding a scaling function (you can see the Device Data for this in the device) that prescales each image down if it is larger than this, first before displaying it. I think that is what you are seeing. If you remove all images but a handful of small ones, you should see them all appear unscaled and at their correct size (ie with blank borders around them).
Also, tail the PSS log file, you can see the messages being logged in there about pictures being scaled so that you can confirm what is happening.
No, I saw the section that referred to scaling and you are correct, it seems to have been added to correct images larger that the screen resolution and it works perfectly. When I put an image in my pictures folder that is too large for the screen it scales it down to fit. (When the ZoomAmount1 and 2 are changed as detailed above)
The ZoomAmount1 and 2 settings are in fact just that, a random zoom variable for your images. When they are left default the same image will refresh zoomed in and out at different intervals so it's not scaling it is actually zooming in and out on your image.