In working with the Picture Library in Sharepoint 2007, I've run across 2 limitations:
1. No web part connections. For some reason Microsoft decided that Picture Libraries would never need web part connections. It's greyed out, as seen here:
2. Picture Libraries do not have the option to give users permissions to only view the pictures they created (and not view pictures that other users created). You can do this on non-document, non-picture library lists. Here is what it looks like on the 'Advanced Settings' page for a list:
But you don't get that on a picture library.