No - iPhoto is a database and it handles all storage of original photos as well as the edited version of the photo. Albums are pointers to photos that exist in events. You can think of events as somewhat inflexible folders since there is a one to one correspondence between photos and events, but not photos and albums.
You might have a look at PhotoMechanic which stores all photos in the filesystem and you can leverage familiarity with that idiom to not be surprised by a photo appearing in an album but be stored elsewhere.
Since iPhoto doesn't really duplicate photos when you place a photo in one album or another, it's not clear if there is a worry about duplicates or a an actual workflow issue that will systematically create duplicates of your photos.
You will have to make a call on how much time to spend learning a new program versus becoming comfortable with how iPhoto works - but most people can quickly learn to avoid actions that preclude having iPhoto duplicate photos without you being aware of the duplication.
I can't reproduce your problem in Mavericks or Mountain Lion; if I add an image to the watched directory and start the screensaver, the new image appears; if I delete the image and restart the screensaver it disappears. So a logout/login cycle and/or restarting the Mac seems called for.
But if those fail, I saw a similar issue some years ago that resulted from a corrupted screensaver preferences file, and you could try solving it the same way: Try flushing the screensaver preferences by deleting the plist file.
To do that, in the Terminal, run the following (quit System Preferences first):
rm -i "$(ls -t ~/Library/Preferences/ByHost/com.apple.screensaver.[0-9A-F]*.plist | head -1)"
The -i is for safety; it should ask if you want to remove a single file, like this:
remove /Users/trey/Library/Preferences/ByHost/com.apple.screensaver.65BC01F5-7A67-5B3E-9193-9464C78533AD.plist?
Confirm by pressing y and return. If it asks to remove a file that doesn't look like that, or tries to remove more than one file, press Control-C to abort.
Now re-open System Preferences, select the screensaver again and point it at the Dropbox directory again. The screensaver should now update normally.
Best Answer
I would verify that your iPhoto library is fully intact. To do this:
/Applicationsfolder.OptionandCommand, double-click iPhoto.You'll be presented with a Rebuild Photo Library window. I would check the following options:
Click
Rebuildand wait until the process is complete. Once it's all done, go back to System Preferences and check to see if you can select iPhoto and albums okay.If the issue persists, I'd take a look at this article on Mac OS X Hints and follow the steps listed there.
Good Luck!