Last night, I uploaded the source code and release package for version 2.0 of the photo handler. I'll post more about the details of this new version in the next few days, but I can tell you that most of it has been rewritten, and it can now be used as a standalone application or as a control. What's more, the control is fully templatable, so if you don't like the default rendering, you can take it over and create your own. I've included a template example that reproduces the default rendering, which should give a good starting point.
Download the handler from here:
UPDATE: the handler is now hosted on Codeplex.