In system preferences / desktop and screensaver.

Did you update iPhoto? If no, update it from the App Store then run it so it updates your iPhoto library.

It can take several seconds for iPhoto and Aperture libraries to appear in the Desktop pane. They don't appear immediately. Also, are you using the most recent versions of these applications (9.3.2 and 3.3.2, respectively)?

Have you actually launched iPhoto since you've installed ML? If not, open iPhoto once and see if that links it to the Sys Pref.

Juyst try opening Sys Prefs > D & S > Desktop once and waiting a few seconds. It will show up.

Do you have a huge library or something? I have maybe 50k images in Aperture and iPhoto and it takes less than 10 seconds for their libraries to appear.

(On the other hand, in your OP, you said that you can't see your iPhoto library, so things are looking up! 😉)

I have the same problem and just posted this:

I did a clean install of Mountain Lion on my MBP. I couldn't find my Lion disk and ended up deciding to buy iPhoto from the App Store. I imported my iPhoto library from a back up and iPhoto updated everything, everything works fine - except that when I was looking around Mountain Lion and went to look at the screensavers, none of the fancy photo slideshows will let me use my own photos. The only options I get are the four default collections and a 'Choose Folder...' option. Since the photos are all packaged up in the iPhoto library, I can't select them (it's greyed out). I was expecting my albums, events, faces etc to be listed automatically. Tried the command above but it didn't work.