I've not really been a fan of digital picture frames (unless they can be hacked to do more than just display pictures) or most keychains. Keychains tend to annoy me because they make my keys hard to fit in my pocket. Currently I carry around a USB drive and a holder for my D20 (yea, I'm a dork) with my keys. While I probably wouldn't add anything else to my keychain, this is a pretty cool idea.
Basically what you have here is a cross between one of those keychains that has a small picture in it and a digital picture frame. It features a 1.8-inch LCD screen and a whopping 8MB of memory. That doesn't sound like much, but that'll hold up to 74 pictures. The lithium ion battery should give you enough juice for 9 hours of viewing.
I'm not sure how smart of a purchase this would be. First, you're just asking to have this thing broken, as it'll constantly be getting smacked by a bunch of keys. Then you have to think about the battery, I'm going to venture a guess that it doesn't run off of anything as standard as a AAA, so you'll likely be annoyed when it comes time to buy a new one. If this still sounds like your cup of tea, you can get one for around $40.
The greatest keychain ever [via boygenius]