Comment 4 for bug 899647

Yes, you can select the image you added from the 'pictures' combo. You can't go back with the '+' and get it from whatever directory you originally got it from (pick an image NOT in ~/Pictures). I didn't think the '+' function really added it to any particular list. You'd have thought it would add it to the 'wallpapers' displayed. I never realized it was getting added to 'Pictures Folder' because I have a lot of pictures in ~/Pictures and didn't notice. So I'd go back to the original directory and found I couldn't select it ('open' greyed out).

So it gets added to 'Pictures Folder', and is displayed along with everything else in ~/Pictures. But it's not in your ~/Pictures folder - it's been copied to ~/.cache/gnome-control-center/backgrounds with a weird name. The dialog box links that copy into the list that it offers under 'Pictures Folder'. It shows up with the weird name from the cache, which is unfortunate.

I think it would make more sense to add it to Wallpapers, with its original name. The whole process seems only half thought-out.

BTW, this issue is present in Precise as well.