Just having downloaded 2.0a6, i've got to say: well, it obviously works - after a fashion. NOTE: The problems listed below apply to my machine - your mileage may vary.

Bugs to be aware of:
- picking a local folder of images must be repeated after each tiling run - on the second try, it doesn't find any more source images. Remove the folder from the sources, then add it again. It'll work one more time.
- the "Save" button in the "Add Folder" dialogue only activates after toggling the "follow aliases" checkbox. Actual setting doesn't matter on my configuration, only touching it is necessary.
- Either you've got a lot of pictures at hand, or you may need to "loosen" the tile placement rules - or you may not get a result at all, because no matching tiles are available. For testing, i used "Image may appear in any number of tiles" and "1 tile apart", with the "image cropping" slider positioned to the middle.

My summary for now:
Promising, but some interface/handling glitches need attention.