How do I automatically create and set wallpapers based on random quotes?

You could write a bash script to do this for you. Based on the xplanet tutorial (for setting the wallpaper, it's some gconf-magic ;) ) and this thread for writing the text using imagemagick.

Something like this:

#!/bin/bash

convert -font "./verdana.ttf" -fill "#101411" -pointsize 33 -gravity "West" -draw "text 1,0 'foobar'" bg.png text.png
gconftool -t str -s /desktop/gnome/background/picture_filename text.png

Here we go, a full featured 'create a wallpaper to with a random quote on it', which could even be modified to 'to pick a random wallpaper to print a random quote on it'. ;)

Usage: Just look at the conf-section. Have fun!

#!/bin/bash

# This is a script which prints random quotes (gathered from files) on to
# a defined wallpaper.
# Some ideas are coming from the xplanet-script located at: http://rbrusu.com/xplanet-desktop-wallpape.html

# Written by Robert 'Bobby' Zenz ([email protected])
# Written for UK at Superuser.com


# Config-Section
# --------------
quote=~/quotes.txt              # Set this to a folder, for picking random files, or set
                                # set it to a file, to pick random lines
wallpaper=~/wallpapers/         # Set it to a fixed wallpaper, or to a folder to pick
                                # a random one inside that
tempPic=tempWall.png            # The name of the temporary file

textSize=33                     # The size of the text
textColor="#555555"             # The color of the text (watch the quotation marks!)

sleep=3m                        # Set how long the script will pause before
                                # picking a new wallpaper/quote
#---------------


# Global variable, please ignore this...
pickedFile=GlobalyDefined
pickedQuote=GlobalyDefined
pickedWallpaper=GlobalyDefined

function getRandomLine {
    pickedQuote=$(shuf -n 1 $1)
}

function getRandomFile {
    cd $1

    set -- *
    length=$#
    random_num=$(( $RANDOM % ($length + 1) ))

    pickedFile=${!random_num}

    while [ ! -e $pickedFile ]; do
        pickedFile=${!random_num}
    done

    pickedFile=$(pwd)/$pickedFile

    cd -
}

function main {
    if [ -d $quote ]; then
        getRandomFile $quote
        pickedQuote=$(cat $pickedFile)
    fi
    if [ -f $quote ]; then
        getRandomLine $quote
    fi

    if [ -d $wallpaper ]; then
        getRandomFile $wallpaper
        pickedWallpaper=$pickedFile
    fi
    if [ -f $wallpaper ]; then
        pickedWallpaper=$wallpaper
    fi

    convert -fill "$textColor" -pointsize $textSize -gravity "Center" -draw "text 1,0 '$pickedQuote'" $pickedWallpaper $tempPic
    gconftool -t str -s /desktop/gnome/background/picture_filename $tempPic

    sleep $sleep
    exec $0
}

main

That script now has a home at GitHub.