I love this app. I have it set my wallpaper from my favorite images and it auto refreshes on whatever frequency I choose. There is an upgraded version that does trickier image settings and for only $0.99 why not? You can also have it pull from Facebook photos – your own and your friends images. Fun stuff to always see a new pic when I go to my phone.
Free version here: https://market.android.com/details?id=com.larvalabs.photowall
I know that the live wallpapers can be somewhat battery draining, but I haven’t had much of an issue with this particular one. I have mine set to update only every 6 hours.