Here are some pics of the picture frame build, sorry I didnt take many and I dont have any that show me stuffing it into the frame.
I will add a picture of it turned on in its final location, the one where it is hanging on the wall is before I ran the cat5 and power to it.
Basically I just took the laptop apart so I could free up enough wire for the monitor to be on the bottom side of the mother board. I stripped out crap I didn't need to slim it down and loose some weight (keyboard, battery, dvd drive, plastic parts, etc) I built the frame from 1x2 oak, routed the groove for the glass, took my measurements to Lowe's and had them cut the glass, had hobby lobby cut the matte board (they cut it exact and put a nice 45 degree bevel on it). Painted the frame black, put in the glass and matte board. Put the lcd screen in face down and used hot glue to hold it to the matte, used the back of the lcd case for support, hot glued the motherboard to the back of the lcd case, tucked wires and used a usb wireless keyboard and mouse. Hung it on the wall and ran the cables behind the drywall. I am really happy with the way it turned out. I used Roy's flickfetcher program and now all my wife has to do is add photo's to her flickr account and they automatically populate to the LMCE screensaver which just runs non-stop on this media director (unless we watch a video on it or something). All I really have left to do is solve the lcd on/off situation and i will be totally done, right now I can only turn it off through lmce, it wont come back on on its own.
I would prefer Thom's method to work because then I can set it up to turn the screen on and off based on events or time of day. I have not yet had a chance to check my logs to see what the problem is.