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There are several ways to go about this. What I usually do is this:
I add the frame to my canvas and then add the picture behind it and resize it how I like. Then I click on my frame layer and click inside the area that the picture should be. Then I Select>Modify>Expand and expand the selection by 2 pixels. Then with the dancing ants still around the area, I click on my picture layer and then go Select>Inverse and then hit the delete button.
Let me know if you need screen shots. I have PSE 5.0 on my computer.
For circle frames, I use my cutout tool in a circle shape, then place it behind the frame and resize. then I use my eraser tool, making sure that I have selected the layer I want to erase. and erase anything that is sticking out from behind the frame. Then I link the layers together.