I came across this blog post by Justin of Glowview where he shows off his "hanging wall" PC which is an old laptop mounted into a picture frame. He discusses how he did it and the reasons: using it as a cool digital picture frame with online syncing, file server, backup device, extra display, etc. He says the most difficult thing was trying to find a matte for the frame.
There are no instructions on how to perform the switch, probably since each frame and computer will differ. This could be a really cool project - worth taking on if you have an older working laptop that you don't mind tearing apart (perhaps something that would only fetch 100 bucks on eBay or is just lying around the house). Maybe even a cheap Netbook or Ultra Mobile?