Due note, that you WILL notice a hit in performance. You've been warned!

1. Download this Zip from here: http://dl.dropbox.com/u/22031175/LWP.zip and extract to your SD card.

/sdcard/LWP
2. Using a file manager with Root access, copy
/sdcard/LWP/libRS.so
/sdcard/LWP/librs_jni.so
3. Paste and overwrite those files into
/system/lib/
4. Copy LiveWallpapersPicker.apk from
/sdcard/LWP/
5. Paste into
/system/app/
7. Grant LiveWallpapersPicker.apk these permissions
User Read/Write
Group Read
Others Read
8. Copy android.software.live_wallpaper.xml from
/sdcard/LWP/android.software.live_wallpaper.xml
9. Paste into
/system/etc/permissions
10. Reboot and enjoy!