My opinion:
1. Resolution. Generally the bigger the picture the greater the resolution. Digital picture frames don't have that great resolution to begin with, it's about the same as your computer screen. I would estimate half the side to side or top to bottom resolution of a good inkjet or professionally made print of the same physical size. I would want at least 1024x768.
2. How many pictures will the frame hold?
3. Is it hard to get your pictures into the frame? You will want to try this in the store before you buy and part of the exercise is to learn about what you materials you need to bring and use (camera memory card? USB cable? a running computer?)
4. Does the frame have both manual and automatic advance to the next picture?
5. I would say that blending effects from one picture to the next (will add to the price) are important only if a sudden change from one picture to the next makes your heart jump.