If it weren't for the obvious lens, this would be an item we'd expect to have seen from apurveyor: A Webcam that watches you watching it, kind of like an drawing come to life.
We can't help but think that this is one of those inventions that, years from now, will be laughable when everyone has a two-way video watch phone. In the meantime, this combo digital photo frame and Webcam is at least taking a step in that direction because Red Ferret says it's portable and small enough to stow in your pocket.
If you get replace your grandmother'sframe with one of these, however, be sure to warn her before calling to say you can see what she's looking at. Otherwise you might give her a coronary.