I wanted to use a digital picture frame also, but couldn't find one that had any inputs besides those for memory cards (no VGA or s-video). The only thing I saw that was comparable was the Lilliputs you mentioned, but they were kinda high and although it "supports" higher resolution, their native resolutions were not what I was looking for -- I was concerned how things would look. The PS1 LCD sounds like a good way to go.
I just went with an extra cheap 15" monitor I had lying around and mounted it on top of my mini cab. There's no need for a plugin with MaLa -- it's pretty easy to set up. I mostly use it as a marquee of sorts.