Nice work. Getting rid of the cable was actually the most important feature for me. It is almost impossible to spot that this is actually an electronic device if one doesn't notice the small button at the bottom.

I've built something very similar as well.

For me, I found that the display I'm using works reasonably well for photos, but you need to slightly boost the contrast of the image before updating the display, to compensate for the darkness of the display. If you're using PIL in python, this is just something like "image = PIL.ImageEnhance.Contrast(image).enhance(1.3)"

I do that immediately before dithering into 16-greys, and get entirely acceptable photo displays that way.

I am using simple shell script and imagemagick to convert folder full of images and then randomly rotate the pictures. I tried playing with contrast but after dithering and that did not produce good results.