(PSP Version 5 and above)
We'll start with a 120 X 136 pixel .jpg.
Playing with layers
PSP opens a .jpg image with only one layer, called Background. Add a new layer to the image by clicking on the new layer icon 
and name it bgcolor.
Right-click on Background layer and select 'duplicate' from the menu. The duplicated layer is named 'Copy of Background'. Rename this to image and delete the original Background layer. Click on bgcolor layer and drag it below image layer. The layer palette should now resemble:
To make a frame around the picture, we first have to create some extra space. The best way to do this is to increase the canvas area of the image. I've planned to keep the frame 15 pixels thick.
Click Image - Canvas size. Enter 150 pixels in New Width and 166 pixels in new Height and be sure to check the two checkboxes for centering the image horizontally and vertically. Click on the 'OK' button to proceed. The image now looks like:
Save this image since we will now be creating different types of frames around it.
A rich brown frame
Activate bgcolor layer by clicking on its icon in the Layer Palette.
Make the foreground color to a deep brown (R = 102, G = 51, B = 0 OR #663300) and using the Fill tool 
, fill the layer with this color.
Now select the image layer and with the Magic Wand tool 
(Tolerance = 0, Feather = 0) click on the brown color.
Click Image - Effects - Cutout and use the following settings:
Fill Interior with color checkbox: Unchecked
Shadow color: Black
Opacity: 100
Blur: 2.5
Offset Vertical: -2
Offset Horizontal: -2
Click on 'OK' to proceed.
Activate bgcolor layer and click Image - Effects - Buttonize. Set Height and Width at 4, Opacity at 100 and select Transparent Edge radio button. Click on 'OK' button. The final image should resemble:
