Mike Hall recently blogged about me building a digital picture frame. It is true :). I'm going to post some images and some text about it once I write something up - I downloaded BlogJet for that very purpose. It's written in .netCF, running on a custom Windows CE OS. The reason I used Windows CE is that I wanted something compact that could operate without a hard drive - no noise! I was then able to burn the whole OS and app onto a CD (flipping necessary reg keys to start up my app). Another advantage of CE is that I could potentially copy this onto a CF card, and use an IDE-to-CF adapter to completely remove the laptop of moving parts.
Here's a quick preview:
BTW if anyone knows of anyplace where I can download cool 1024x768 wallpaper for free without any watermarks, let me know ;)