XBMC recently added EXIF parsing to their 'my pictures' section, so now your photos are all rotated correctly! Yeah!
I also recently discovered DAAP and a couple projects for serving it up from linux: daapd and mt-daapd (look: RPMs!). daapd seems to be working well, but I'm not overly fond of its implementation. I have mt-daapd all packaged up and ready to try but haven't gotten around to it yet. I thought this would be the solution to XBMC's slow search feature, but unfortunately it doesn't use the search feature of DAAP. So, we went back to SMB mount, and I finally found the option to 'switch view' after you've scanned your collection; so apparently ID3 does work.. very nice.