which is that it allows you to have multiple girlfriends who don't know about each other, and change all the photos round every day so that whichever one is visiting that night doesn't suspect! And I have a nasty feeling that that would indeed be the most profitable market for the thing…

In what way can't you (that's a generic, and rather unscrupulous 'you') do this with a regular picture frame?

The colleague suggested in particular that the updating might be done automatically...

But what if the girlfriends visit unexpectedly? Clearly the solution is to get all your romantic partners RFID-tagged.

But then you need to tag them. You should have a webcam so it can seemlessly display a picture of anyone who enters, though you may prefer to make it do so only after the n'th visit, or similar :)