Edit: The main thing I wanted to address was really just the issue of people stating that the Photos App doesn't even display content from your Pictures Library anymore.
This is bizarre. All my SkyDrive pictures are offline, I have added their location to the Pictures library, but they do not show up in the app at all. They do however show on the live tile, which makes it all the more baffling. Would you mind uploading a screenshot of your Pictures Library Locations screen (Pictures Library -> Manage Libraries) please?
Has anybody else managed to get "Available Offline" SkyDrive pictures/folders to show up in the Photos app (i.e. not just on the live tile)?

