Digital picture frames have certainly started to gain in popularity and as a result, competition in the segment has begun to seriously ramp up. It takes more to convince consumers to buy your frame over that of your competitor, because all of your products fundamentally do the same thing: show off family photos in a digital kind of way.

The upcoming Mustek PF-i700 digital photo frame boasts a feature that I have yet to see in another product of this type: it’s got an iPod dock. It’s also got a set of stereo speakers and a seven-inch 480×234 TFT screen, helping it straddle right in between the iPod speaker dock and digital picture frame markets. In addition to displaying photos, the PF-i700 also does music and videos from your iPod. And then there are the SD, xD, MMC, MemoryStick, and MemoryStick Pro card slots as well.

An official unveiling is scheduled for CES 2008 next month, but with a very affordable $129.99 price tag, I imagine the Mustek PF-i700 digital frame will sell like hotcakes. Look for it in March.